SEC Drops Zcash Probe: Rare Clarity for Privacy Coins, ZEC Crypto To $1,000?

Ben Graham · 7 horas atrás

The US Securities and Exchange Commission (SEC) used to terrorize crypto firms under Gary Gensler during the Biden administration so much so that it was pointless for founders to innovate. Lawsuits used to pile up and enforcements remain the order the day. Donald Trump took over, promised to end the nightmare, and he did, and now, the era of regulation through enforcement is over.

Under Trump and Paul Atkins, the current SEC chair, lawsuits against top crypto firms like Coinbase and Uniswap have been settled or withdrawn altogether. Therefore, it came as no surprise when the regulator officially closed its 2023 investigation into Zcash, a privacy-focused cryptocurrency, without recommending enforcement action.

We are pleased to announce that the SEC has concluded its review and informed us that it does not intend to recommend any enforcement action or other changes against Zcash Foundation regarding this matter. https://t.co/zjxfh3mmst

— Zcash Foundation (@ZcashFoundation) January 14, 2026

ZEC crypto, which is undoubtedly one of the top cryptos to consider in this cycle, reacted calmly, holding its recent range after months of pressure tied to regulatory fear. ZEC USDT is firm above $400, and remains one of the top performers, standing out from the thousands of coins. On Coinglass, nearly $3M of ZEC crypto shorts were also liquidated prices briefly jumped.

(Source: Coinglass)

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Zcash Probe: What is ZEC? A Security or Commodity?

By the SEC stepping out and dropping their investigation, the team can focus on building. However, it ought to be remembered that the case is being dropped after over two years of investigation. The probe began in late 2023. The Zcash Foundation received a formal subpoena from the SEC in August 2023. Interestingly, the existence of this probe was kept secret for nearly two and a half years. The public only learned of the investigation when the Foundation announced its successful conclusion this week.

From their internal files, the SEC sought to understand whether ZEC crypto was a commodity like Bitcoin or an unregistered security. To determine the proper ZEC classification, the regulator thoroughly investigated whether its initial funding, token distribution mechanisms, or governance structure constituted an unregistered securities offering under US law.

Additionally, there were questions related to the “Dev Fund”, which is more like a portion of mining rewards channeled to the Zcash Foundation and the Electric Coin Company to fund building and community initiatives. The regulator wanted to know whether these arrangements suggested a centralized investment contract, which would make ZEC an unregistered security.

Privacy Features In Question

Beyond its classification, the SEC also probed its privacy features. Like the high-flying Monero, Zcash offers optional privacy features for users via zero-knowledge proofs (zk-SNARKs) to shield transaction details. Accordingly, regulators scrutinized whether the technology complied with anti-money laundering (AML) and economic sanctions requirements.

The good news is, after reviewing the case, the agency walked away. There were no fines, charges, or forced changes; a win for privacy. From what’s known, privacy-centric coins like Zcash and Monero have kept regulators nervous for years. Unlike Bitcoin or Ethereum, whose transactions can be tracked at any time of the day, Zcash has options, as mentioned earlier, that shield all transfers. As of mid-January 2026, over 4.5M ZEC were shielded.

(Source: TheBlock)

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A Win for Privacy: Will ZEC Crypto Reclaim 2025 Highs?

Privacy coins are not something new. Monero, for example, was the first and has been in existence for over 10 years. However, they have been living under a cloud since 2019. Many exchanges removed them to avoid regulatory headaches. That history explains why this closure matters more than it sounds. When the SEC closes a case without action, it lowers risk for exchanges, funds, and builders. Fewer legal landmines mean fewer excuses to block listings or freeze access. That is why Zcash holders paid attention, even without a big price spike.

Quick take on the @Zcash founder @Zooko meeting with the SEC.

This wasn’t about price, ETFs, or hype. It was about whether cryptographic privacy can be treated as legitimate financial infrastructure.

Zcash was there because it’s the cleanest privacy case regulators could… pic.twitter.com/WGWGOar4Ds

— Zipene (@Zipene) December 25, 2025

Following this news, the ZEC crypto began climbing. The psychological floor is at $300 but bulls need to convincingly close above $550. A high volume close above December highs means ZEC holders can begin dreaming of $730, which is 2025 highs, and later $1,000 if crypto finds momentum.

While the tone in Washington has changed, it doesn’t mean privacy coins are now “in the box” in the US. If anything, regulators can still review privacy tech even if they don’t end up punishing the team. Moreover, privacy coins like ZEC still face delistings outside the US. Governments can change tone fast, especially around anti-money laundering rules, capping gains.

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