Zcash took a surprising hit on Tuesday, falling 7.6% even after what looked like good news from regulators. The Zcash Foundation announced that the U.S. Securities and Exchange Commission (SEC) has closed its investigation into the public charity without recommending any enforcement action.
The inquiry began in August 2023 over concerns related to certain crypto asset offerings. With the SEC stepping back, it seemed like a big regulatory overhang had been removed for the privacy-focused cryptocurrency.
At first, the market reacted positively. The ZEC token jumped 12%, reversing a recent decline. But the rally didn’t last. By the end of the day, Zcash was trending downward again—a reminder that crypto trading, especially for privacy coins, often reacts to broader market sentiment and lingering uncertainty, not just regulatory news.
Here’s what happened: the SEC had issued a subpoena on August 31, 2023, as part of an investigation titled “In the Matter of Certain Crypto Asset Offerings (SF-04569).” The agency has now decided not to pursue any enforcement action or require changes from the foundation.
Despite today’s drop, ZEC has had an impressive long-term run. It’s up 642% over the past year, though it still sits far below its all-time high, down about 87%. On a shorter timeline, the token is down 3.7% for the week and barely up 0.2% for the month.
The news comes as the SEC, under new leadership with Chair Paul Atkins, has been scaling back enforcement against several major crypto firms, including Uniswap, Coinbase, and Robinhood.
The Zcash Foundation emphasized that it remains committed to transparency and regulatory compliance, continuing its mission to advance crypto infrastructure while preserving user privacy.
In short, while the SEC decision removes a major risk for Zcash, the market’s reaction shows that privacy coins often face extra skepticism, and even positive regulatory developments don’t always translate to sustained price gains.
