Key Takeaways
- The Zcash Foundation closed Q1 2026 with $36.7M in net liquid assets and $817,618 in total operating expenses.
- The SEC concluded its investigation into the Zcash Foundation with no enforcement action, removing a major regulatory overhang for ZEC.
- ZF plans NU7 implementation and Z3 stack advancement in Q2 2026, with Zcon7 scheduled for Cancun this fall.
Zcash Foundation Reports $36.7M Treasury, SEC Clears Investigation in Q1 2026
The report covers a three-month period that Executive Director Alex Bornstein called one of the most consequential in the Foundation’s history. The quarter opened amid governance upheaval at Electric Coin Company (ECC), where the entire development team resigned in early January following a dispute with Bootstrap, the nonprofit overseeing ECC.
ZEC dropped sharply on the news, but the Zcash network continued processing blocks and settling transactions without interruption. The Foundation moved quickly to address the transition, publishing a statement reaffirming that no single organization controls the Zcash protocol.
When ECC’s DNS seeders stopped responding, ZF deployed replacement seeders in the United States and Europe within days. The Foundation also announced a native Rust DNS seeder built on the zebra-network crate, featuring per-IP rate limiting and integrated Prometheus metrics.
On the regulatory front, the SEC notified the Foundation that it had closed its investigation, which began with a subpoena in August 2023, without recommending enforcement action. The resolution removes a significant legal question that had surrounded the privacy-focused project for nearly three years.
The Foundation’s simplified balance sheet, unaudited and valued at end-of-quarter prices, showed total liquid assets of $36,701,379 against total liabilities of just $12,714, leaving net liquid assets of $36,688,666. ZEC holdings of 85,412.34 coins, valued at $248.22 per coin, made up 58.6% of the portfolio. USD and USDC combined accounted for 33.5%, with BTC rounding out the remainder at 7.9%.
Q1 operating expenses totaled $817,618, averaging roughly $272,539 per month. Team compensation was the largest single line item at $592,565. Program expenses came in at $98,068, general overhead at $93,960, and community and event costs at approximately $28,600 combined.
Engineering output was notable. The team shipped three major Zebra releases. Zebra 4.3.0 addressed two critical vulnerabilities: CVE-2026-34202, a remote denial-of-service flaw rated CVSS 9.2 that could crash a node via crafted V5 transactions, and CVE-2026-34377, a consensus logic error rated CVSS 8.4 that could allow a malicious miner to induce a chain split. Both were patched and publicly disclosed.
The Z3 stack, which integrates Zebra, Zaino, and Zallet with built-in Tor support, saw meaningful progress. Work 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 in 2026.
NU7 sentiment polling gathered input from ZCAP members, coinholders, and the Engineering Caucus across five countries. ZCAP turnout hit 57%, with coinholder participation at 7.25% of circulating ZEC. Broad consensus emerged around Project Tachyon and Orchard Quantum Recoverability, which drew support from over 90% of both groups.
Proposals, including Zcash Shielded Assets and Consensus Accounts, showed significant divergence between the two panels. On March 24, the Foundation hosted Zcomm 2026, a virtual event featuring four sessions over eight hours with speakers from Web3Privacy Now, Aztec, DWeb, and the Ludlow Institute. Combined live viewership across parallel streams reached approximately 500.
In February, the Foundation welcomed Scott Onder to its board. Onder serves as Chief Investment Officer at Mercy Corps and co-founder of Mercy Corps Ventures, with a portfolio spanning 38 early-stage ventures across Africa, Latin America, and Southeast Asia.
Looking ahead, Q2 priorities include NU7 implementation, Z3 stack advancement, and Zebra performance benchmarking. The Foundation is also planning the Zcash Dev Summit in Rome alongside ZKProof8 and Eurocrypt, with Zcon7 set for Cancun in the fall.
ZEC has traded between roughly $585 and $632 in recent sessions, up 10% to 15% over 48 hours as of May 20, with demand for privacy coins as a primary catalyst.
