ZEC Rises into the Top Ten, Old Controversies Resurface

In less than a month, ZEC surged over 150% to enter the top ten by market capitalization, thanks to its privacy coin features, but old controversies have resurfaced, including ongoing fees, non-default privacy, governance turmoil, and security vulnerabilities.

Written by: Conflux

In less than a month, ZEC rose from about $486 in mid-August to a peak of $1,200, an increase of over 150%. ZEC is an old asset launched in 2016, based on a code fork of Bitcoin, with a total supply cap of 21 million coins, the main difference being the introduction of privacy transactions based on zero-knowledge proofs (shielded transactions), which can hide the sender, receiver, and amount in transactions. ------ This is also the origin of its identity as a "privacy coin." This round of price increase has pushed it into the top ten by market capitalization across the network.

Old Grudges of Two Veterans

As the price surged, two old grievances related to Zcash were simultaneously brought to light. Wang Chun, co-founder of F2Pool, stated on X that six years ago, due to the other party's inability to even understand time zones, he directly blacklisted the entire team, claiming that this decision remains one of the "most correct decisions" he has ever made. "Shen Yu," co-founder of the crypto custody platform Cobo and mining pool F2Pool, also shared his story: on the night of the mainnet launch in 2016, after he had just mined a little ZEC, the transformer at his home mining farm was struck by lightning, leaving him with a psychological shadow, and he has not held ZEC in his personal wallet since then.

The price and the criticism rose almost in sync.

Bringing up old grievances was just the beginning; half an hour later, Wang Chun posted a longer tweet breaking down his dissatisfaction with Zcash into four more specific arguments------from the launch mechanism to recent security incidents, he listed them one by one.

Fees Never Stopped

Wang Chun's first argument is: a coin that directly writes self-serving clauses into block rewards should not be packaged as a "clean" and neutral currency. This refers to the design after Zcash's mainnet launch------Bitcoin's block rewards are only given to miners, while Zcash is not. In the first four years after the mainnet launch, 20% of each block reward was allocated as "founder rewards," distributed to founders, employees, advisors, and early investors, totaling about 2.1 million ZEC, which accounts for 10% of the total supply cap of 21 million coins. According to the original design, this fee was supposed to last for four years and end in 2020------after which Zcash would become a "clean" asset like Bitcoin: all block rewards would go to miners, and no team or organization could take a share from the new supply.

However, when the fee actually expired in 2020, the community voted to pass ZIP 1014, extending the same 20% block subsidy under the name of a "development fund" until 2024, distributed to Bootstrap, the Zcash Foundation, and several large funding programs. The mechanism of allocating 20% from block subsidies to non-miners did not completely disappear with the expiration of the "founder rewards"------the name changed, the distribution targets changed, but the fact that "20% of each block must be taken away before it reaches miners" has never truly ended for Zcash.

Privacy Is Not Default

The most notable technology of Zcash is zero-knowledge proofs, which theoretically can completely hide transaction details. However, the protocol itself does not enforce privacy------users can freely choose between shielded (private) addresses or transparent addresses, and some wallets and exchanges only support transparent addresses for compatibility reasons. Zcash's official stance also acknowledges that to truly achieve transaction privacy, services that default to enabling shielded transactions must be actively chosen.

This means that Zcash's privacy capability does not equate to all ZEC in circulation being inherently private. "Optional privacy" and "default privacy" are two different things; the former is more like a functional switch, while the latter is a protocol commitment------and what Zcash has provided for the past decade has always been the former.

Team Exodus

In January 2026, the Electric Coin Company (ECC) team responsible for Zcash's core development collectively resigned. ECC stated that it was forced out due to significant disagreements with the governance body Bootstrap's board; Bootstrap attributed the conflict to governance arrangements and legal restrictions on non-profit organizations. Two months later, both parties reached an agreement, with ECC gradually winding down operations and transferring technical assets to a newly formed team, while the project itself did not come to a halt.

The storm has calmed, but the fact that a development protocol, which holds core technical assets, could reach a point of collective resignation from the Bootstrap board within ECC's governance system indicates that this governance structure is still far from "mature."

Security Vulnerabilities

On May 29, security researcher Taylor Hornby discovered a latent defect in the zero-knowledge proof circuit of the Orchard privacy pool that had been present for about four years, theoretically allowing someone to create fake ZEC without leaving an on-chain trace. The team immediately initiated an emergency fix: on June 2, they temporarily shut down Orchard-related transactions, and on June 3, they restored it through NU6.2; during the same period, ZEC rebounded from $544 to $624. However, on June 5, well-known investor Arthur Hayes publicly announced that he had cleared all his ZEC positions, citing a straightforward reason: even if the circuit has been repaired, there is no cryptographic means to prove whether anyone has secretly issued fake coins using this vulnerability over the past four years------"fixing" and "proving it hasn't been exploited" are two different things. Subsequently, ZEC quickly fell, dropping to around $309, nearly halving.

This precisely undermined Zcash's most fundamental narrative: its total supply is also capped at 21 million, which has always been packaged as "a more thorough digital hard currency than Bitcoin"------but every issuance of Bitcoin is recorded on a public ledger, and anyone can verify the total amount; Zcash, in order to maintain privacy, has obscured part of this ledger, resulting in the fact that for the past four years, no one has been able to prove whether the actual circulation of this "hard currency" is truly still locked within that cap of 21 million.

Bull-Bear Collision

The bearish side has both arguments and real money backing their beliefs: Wang Chun believes that entering the top ten by market capitalization does not mean ZEC deserves to stand alongside Solana and Hyperliquid, asserting that this round of price increase is "purely driven by narrative"; Garrett Jin, known as the "whale agent of the 1011 insider trading," has also shown the same attitude through his positions------as of September 8, he still held a short position of about 39,760 ZEC on Hyperliquid, with a nominal value of about $45 million, an average entry price of $576.3, and despite a floating loss of $22.2 million, he continues to add to his position.

The bullish side is not just making empty claims: the U.S. Securities and Exchange Commission (SEC) concluded its years-long investigation into the Zcash Foundation in January 2026 without taking enforcement action, removing a long-standing compliance concern hanging over the organization; Grayscale estimates that if ZEC's market capitalization reaches 2%, 5%, or 10% of Bitcoin, the corresponding prices would be $1,622, $4,054, and $8,109, respectively; as of August 29, ZEC's market capitalization was $13.74 billion, accounting for only 0.88% of Bitcoin, indicating that there is indeed theoretical room for growth. The ETF listing also allows traditional funds to directly access ZEC exposure without worrying about wallets and private keys for the first time.

The two sides are not arguing about the same thing: one side is calculating "how much market share privacy assets can occupy," while the other side is calculating "whether this team and this mechanism deserve this share."

The Accounts Are Not Settled Yet

From $309 to over $1,200, ZEC has completed a round of intense repricing. However, this round of price increase has not changed its historical issues------the controversy over the distribution mechanism, the paradox of optional privacy products, the old news of governance infighting, and the trust gap from the Orchard vulnerability, none of which have disappeared due to the price increase, nor have any been truly resolved.

The game regarding what supports ZEC's current price is not over yet.

The real test is not whether ZEC can reach a new high again, but whether the market is still willing to catch it at today's price after the shorts are no longer forced to stop-loss and profit-taking begins.

If it cannot be caught, then this round of explosive growth may leave behind just another old asset that has been reignited; if it can be caught, then Zcash can be considered to have truly passed this critical test.

By then, perhaps we will know whether the money that has flowed back in today is buying a future of privacy assets or a sufficiently successful old story.