Zcash Internal Crisis: Entire Development Team Resigns, ZEC Plunges 20% in One Day

The cryptocurrency market has just experienced a major shock as the entire development team behind Zcash (ZEC) suddenly left Electric Coin Company (ECC) – the core development company of the project. This event was announced by former ECC CEO, Josh Swihart, on 1/7/2026 and immediately triggered a strong sell-off wave, causing ZEC’s price to plummet about 20% within 24 hours – the largest decline among large-cap digital assets on 1/8/2026. Governance Crisis: The Spark That Made the Entire Team Leave According to Swihart, the core reason stems from a governance conflict with Bootstrap – a 501©(3) non-profit organization established to oversee ECC and support the Zcash ecosystem. Swihart describes this as a “constructive discharge” (forced resignation in a passive sense), when the Bootstrap board of directors imposed unacceptable working conditions. Specifically, Bootstrap is accused of deeply interfering in operational activities, changing employment terms, and restricting the technical team’s autonomy. As a result, about 25 key members resigned simultaneously, including Chief Scientist Chelsea Komlo – one of the most important minds behind Zcash’s zero-knowledge proofs technology. Although leaving ECC, Swihart affirms that the team will establish a new company to protect research achievements from “hostile governance actions,” while continuing to pursue Zcash’s original mission: building a privacy-focused system that cannot be controlled or censored. Zcash: The Icon of Privacy Facing Turmoil Launched in 2016 as a fork of Bitcoin, Zcash quickly became a symbol of anonymous transactions thanks to zero-knowledge proofs (zk-SNARKs) technology. Unlike many other public blockchains, Zcash allows users to perform “shielded” transactions – hiding addresses, amounts, and transaction contents. However, this event has exposed a reality: even projects considered decentralized can face serious governance risks if their operational structure is not transparent and lacks consensus. According to some analysts, this is not just a personnel crisis but also a major test for the governance model of Zcash in particular and crypto projects in general. Market Panic or Manipulation? Immediately after the resignation news, ZEC’s price dropped sharply, sparking debate on social media. A viral post by the analysis account More Crypto Online on X claimed that ZEC’s chart showed “unusual” drops accompanied by Fibonacci retracement levels, raising suspicions of possible price manipulation. However, many technical experts believe this is likely just a natural market reaction to bad news. The price rejection at key Fibonacci levels such as 61.8% – 78.6% is a common scenario during correction phases after a strong rally, and does not necessarily indicate intentional manipulation. Expert Perspective: Will Zcash Be Affected Long-Term? Mert Mumtaz – an analyst at Helius – states that organizational restructuring may not significantly alter Zcash’s long-term trajectory, as the old team continues to develop the project under a new model. Meanwhile, the Zcash Foundation has also reassured the community that the network remains stable, security and privacy mechanisms are unaffected, and the protocol is resilient enough to withstand this short-term shock. What Investors Should Keep in Mind? Since the beginning of 2026, ZEC has decreased by over 18%, reflecting increased selling pressure amid: Privacy-focused coins are under tighter scrutiny from regulatory authorities. Investors are becoming more sensitive to governance issues. Capital flows are prioritizing ecosystems with clearer growth stories and development speed. Nevertheless, technologically, Zcash still possesses a very strong foundation with zero-knowledge proofs and leading privacy transaction mechanisms in the market. Conclusion: Rebirth or the Beginning of a Downturn Cycle? The departure of the entire development team from ECC is undoubtedly one of the biggest events in Zcash’s history. In the short term, market negative reactions are inevitable. But in the long term, the bigger question is: will “rebirth” under a new company model help Zcash strengthen its position, or is this just the first sign of deeper issues within the ecosystem? The answer will require more time. But for now, investors should remain cautious, closely monitor internal developments of the project, and avoid being swept away by short-term emotional fluctuations in the risky crypto market.