SEC closes Zcash Foundation probe; Q1 net liquid assets $36.7M
SEC closed its probe of the Zcash Foundation with no enforcement action; ZF patched two critical Zebra vulnerabilities and reported $36.7M in net liquid assets and $817,618 in Q1 expenses.
The U.S. Securities and Exchange Commission notified the Zcash Foundation this quarter that it would take no enforcement action in a probe that began with a subpoena in August 2023. Executive Director Alex Bornstein called the quarter “one of the most consequential in the Foundation’s history.” The Q1 report covers January through March 2026.
At quarter end the foundation reported total liquid assets of $36,701,379 and liabilities of $12,714, leaving net liquid assets of $36,688,666. The treasury held 85,412.34 ZEC valued at $248.22 per coin, representing 58.6% of the portfolio. USD and USDC made up 33.5% and BTC accounted for 7.9%.
Operating expenses for Q1 totaled $817,618, or roughly $272,539 per month. Team compensation was $592,565. Program expenses were $98,068, general overhead $93,960, and community and event costs about $28,600.
The report documents a governance disruption at Electric Coin Company in early January, when the company’s development team resigned. ZEC prices fell briefly, but the Zcash network continued to validate blocks and process transactions. The foundation deployed replacement DNS seeders in the United States and Europe within days and released a native Rust DNS seeder built on the zebra-network crate with per-IP rate limiting and Prometheus metrics.
On the engineering side the foundation shipped Zebra 4.3.0 to fix two critical vulnerabilities. CVE-2026-34202, rated CVSS 9.2, was a remote denial-of-service flaw that could crash a node when presented with crafted V5 transactions. CVE-2026-34377, rated CVSS 8.4, was a consensus logic error that could allow a malicious miner to induce a chain split. Both flaws were patched and publicly disclosed.
Work on the Z3 stack, which integrates Zebra with Zaino and Zallet and includes built-in Tor support, continued during the quarter. Development also advanced on FROST v3.0.0, a multi-party signing protocol with cheater detection enabled by default and stronger zeroization. The foundation expects to finalize FROST v3 and ZIP-312 later in 2026.
NU7 sentiment polling gathered input from ZCAP members, coinholders and an Engineering Caucus across five countries. ZCAP turnout was 57% and coinholder participation was 7.25% of circulating ZEC. Project Tachyon and Orchard Quantum Recoverability received support from more than 90% of respondents, while proposals such as Zcash Shielded Assets and Consensus Accounts showed divergent views between the panels.
The foundation hosted Zcomm 2026 in March, a virtual event with four sessions and about 500 combined live viewers. Scott Onder joined the board in February. Planned events include a Zcash Dev Summit in Rome alongside ZKProof8 and Eurocrypt and Zcon7 in Cancun this fall. Q2 priorities listed in the report include NU7 implementation, further Z3 stack development and Zebra performance benchmarking.
The report noted ZEC traded in a roughly $585 to $632 range in recent sessions and had risen 10% to 15% over a 48-hour period as of May 20, citing increased demand for privacy-focused coins.
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