Balaji Srinivasan publicly backed departing Zcash developers after a governance dispute triggered their exit and the launch of a new wallet, as ZEC prices jumped despite broader market weakness.
A core Zcash developer team led by former Electric Coin Company CEO Josh Swihart resigned on Thursday following disagreements with Bootstrap, the nonprofit that oversees Zcash governance. Within hours of their departure, the team unveiled CashZ, a new wallet designed to scale adoption of the Zcash protocol.
Balaji Srinivasan endorsed the developers on X, writing that Zcash “can scale,” “must scale,” and “will scale,” amplifying confidence during a turbulent moment for the privacy-focused blockchain.
Zcash reacted positively to the developments. ZEC rose 7.3% on Friday morning to around $431, even as the broader crypto market remained subdued. Retail sentiment on Stocktwits flipped to bullish, while trading chatter surged to high levels.
The CashZ launch drew additional support from industry figures. Dragonfly managing partner Haseeb Qureshi praised the team, calling them “true believers and cypherpunks” committed to Zcash’s mission.
Swihart said the decision to leave ECC followed a “clear misalignment” with the Bootstrap board over governance direction and employment terms. He stated that the departing developers plan to form a new company with the same team, emphasizing that the Zcash protocol itself remains unaffected.
Bootstrap disputed Swihart’s characterization, saying it acted to ensure compliance with U.S. nonprofit law and protect the broader Zcash ecosystem. The board warned that proposed changes could expose the project to legal and political risk.
Speculation also emerged that Cypherpunk, a firm that pivoted to a Zcash-based digital treasury, could absorb the departing developers. Cypherpunk shares fell more than 1.7% in pre-market trading, with sentiment turning bearish.
Zcash founder Zooko Wilcox weighed in, stating the network remains open source, permissionless, and secure, and that development does not depend on any single organization. Multiple groups, including Shielded Labs and the Zcash Foundation, continue to contribute to the ecosystem.
