Zcash Foundation: $36.7M Treasury, SEC Clears Probe, Patches Critical Flaws

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Zcash Foundation Patches 2 Critical Zebra Flaws, Reports $817K in Q1 Spending

The Zcash Foundation announced this week that it ended the first three months of 2026 with $36.7 million in readily available funds and received positive feedback from U.S. regulators, as detailed in its latest quarterly report.

  • 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.

The price of ZEC fell significantly after the news broke, but the Zcash network continued to operate normally, processing blocks and completing transactions without any issues. The Zcash Foundation responded quickly, issuing a statement to clarify that no single entity has control over the Zcash protocol.

When the original DNS servers used by the Ethereum Classic network went offline, the Zcash Foundation quickly set up new servers in the United States and Europe. They also released a new DNS server program written in Rust, built using the zebra-network library. This new server includes features to limit requests from individual IP addresses and provides data for monitoring with Prometheus.

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%.

Image source: Zcash Foundation report

Total operating expenses for Q1 were $817,618, which averages about $272,539 each month. The biggest expense was team compensation, totaling $592,565. Other costs included $98,068 for programs, $93,960 for general overhead, and around $28,600 for community and event-related expenses.

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.

Good progress was made on the Z3 stack, which combines Zebra, Zaino, and Zallet and includes built-in Tor support. Development also continued on FROST v3.0.0, an improved multi-party signing protocol that now automatically detects and handles cheating, and offers better data deletion. The Foundation anticipates completing both FROST v3 and ZIP-312 by 2026.

Image source: Zcash Foundation report

A recent NU7 sentiment poll surveyed members of ZCAP, ZEC coin holders, and the Engineering Caucus in five different countries. Participation reached 57% overall, with 7.25% of all ZEC coins held being represented in the poll. There was strong agreement – over 90% support from both groups – for both Project Tachyon and the Orchard Quantum Recoverability features.

There were notable disagreements between the two groups regarding proposals like Zcash Shielded Assets and Consensus Accounts. To discuss these and other topics, the Foundation held a virtual event called Zcomm 2026 on March 24th. The event lasted eight hours and included four sessions with speakers from organizations like Web3Privacy Now, Aztec, DWeb, and the Ludlow Institute. Around 500 people watched the event live across different streams.

The Foundation was pleased to add Scott Onder to its board in February. He’s the Chief Investment Officer at Mercy Corps and also co-founded Mercy Corps Ventures, which invests in 38 new businesses in Africa, Latin America, and Southeast Asia.

For the next quarter, our main goals are to launch NU7, improve the Z3 stack, and thoroughly test Zebra’s performance. We’re also organizing the Zcash Dev Summit in Rome, which will be held alongside the ZKProof8 and Eurocrypt conferences. Later in the year, we’ll be hosting Zcon7 in Cancun.

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.

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2026-05-20 20:36