Why is Zcash going up? ZEC vs Monero, risks and regulation

Zcash (ZEC) is going up in 2026 because three things happened in a row: the SEC closed its inquiry into the Zcash Foundation with no action in January, Grayscale converted its Zcash Trust into a spot ETF that began trading on NYSE Arca on August 25, and the share of ZEC held in shielded pools rose to about 29% of supply. The price moved accordingly, and so did the attention.

This article explains what Zcash is for someone who has never used it, what drove the 2026 rally with every figure sourced, how it compares with Monero on the mechanisms that matter, the counterfeiting bug that nobody in the ecosystem can fully close the book on, and the regulatory calendar, with one EU date circled. It ends with what all of this means if you want to move in or out of ZEC without opening an exchange account. We do not predict prices, here or anywhere else.

What Zcash is, in two minutes

Zcash launched on October 28, 2016, built from Bitcoin’s code with the same fixed supply of 21 million coins, according to the Zcash documentation. The difference is the shielded transaction. A Zcash wallet can hold two kinds of balance: a transparent one, where sender, receiver and amount are public just like Bitcoin, and a shielded one, where a zero-knowledge proof (a zk-SNARK) lets the network verify a transaction is valid without revealing who sent what to whom. Funds can move between the two.

Two more pieces matter for the rest of this article:

• Viewing keys. The owner of a shielded address can hand a third party a key that grants read access but not spend authority. The Zcash documentation calls this selective disclosure: the holder decides who gets to audit their history.
• Shielded pools. Zcash has upgraded its shielded cryptography several times, and each generation is a separate pool with its own balance: Sprout, Sapling, Orchard and, since July 2026, Ironwood. The pool names come up below because one of them had a serious bug.

Blocks arrive every 75 seconds today. A network upgrade targeted for November 5, 2026 (NU7) would cut that to 25 seconds, according to CoinDesk’s report on the upgrade.

What drove the 2026 rally

The path was not a straight line. These are the dated facts, each with the outlet that reported it.

January: the SEC walked away. On January 14, 2026 the Zcash Foundation said the SEC had concluded a review that began with a subpoena in August 2023 and did not intend to recommend enforcement action, as reported by The Block. The same week brought bad news: the entire team of Electric Coin Company, the company that built Zcash, resigned on January 7 after a governance dispute with its parent nonprofit, and CoinDesk reported ZEC fell nearly 14% on the day. That team later formed the Zcash Open Development Lab (ZODL) and kept building.

June: a counterfeiting bug and a 38% drop. On May 29, 2026 a researcher working for Shielded Labs found a flaw in the Orchard shielded pool that would have allowed unlimited, undetectable counterfeit ZEC. An emergency fix shipped on June 1. Decrypt reported ZEC fell from a $635 high the day before to an intraday low of $309 on the day of the disclosure, ending it down 37.8%. The details are in their own section below, because they are the most important risk in this article.

July: Ironwood. On July 28, 2026 the Ironwood upgrade activated at block 3,428,143, according to The Block. It opened a new, formally verified shielded pool, restricted the old Orchard pool to withdrawals, and added a turnstile so that no more ZEC can leave Orchard than verifiably entered it. From that point, anyone running a node can check that the circulating supply respects the 21 million cap again.

August: a spot ETF. Grayscale’s Zcash ETF (ticker ZCSH) began trading on NYSE Arca on August 25, 2026, the first US exchange-traded fund holding a privacy-focused coin, with a 2.5% annual sponsor fee and Coinbase Custody as custodian, per The Block’s coverage of the filing. Cointelegraph reported the fund held $463.2 million in assets by early September. On August 22, CoinDesk reported ZEC above $800 for the first time since January 2018, with a market value of $13.87 billion, twelfth among all crypto assets.

September: a new multi-year high. Cointelegraph reported that ZEC peaked at $1,249.28 in early September 2026, with a market capitalisation above $20 billion, up 138% in 30 days. Grayscale’s head of research argued in an August 31 note, quoted in the same article, that financial privacy “could become a ‘must have’ feature” as AI makes it easier to link public blockchain transactions to identities.

Underneath it all: more ZEC is shielded. The Ironwood migration tracker published by ZODL, the team that built the upgrade, showed 4.96 million ZEC in shielded pools on October 10, 2026, 29.2% of circulating supply. A year earlier, in October 2025, The Block put the figure at 4.5 million ZEC from its own shielded-supply chart. Coins in a shielded pool are not for sale on any order book, and more people using the feature the coin exists for is the clearest adoption signal Zcash has.

Two more items are often cited and worth knowing. The second halving in November 2024 cut the number of new ZEC minted per block in half, following the same four-year schedule as Bitcoin. And NU7, if the final decision on October 20 confirms it, also introduces a Network Sustainability Mechanism that temporarily removes roughly 60% of transaction fees from circulation, with the coins returning through block rewards from February 2031, according to CoinDesk.

Zcash vs Monero: the mechanisms, not the brands

Monero (XMR) is the other privacy coin people compare Zcash with, and the two are built on opposite choices. This is a comparison of designs, with the project’s own documentation as the source for each.

	Zcash (ZEC)	Monero (XMR)
Privacy	Optional. Shielded pools hide sender, receiver and amount; transparent transactions do not	Default on every transaction: ring signatures (sender), stealth addresses (receiver), RingCT (amount), Dandelion++ (IP)
Share of coins hidden	About 29% of supply shielded (ZODL tracker, October 10, 2026)	100% by construction
Supply	Fixed cap of 21 million	No hard cap: tail emission of 0.6 XMR per block since May 2022, below 1% a year and falling (Monero technical specs)
Selective disclosure	Full viewing keys: incoming and outgoing history, without spend authority	View key shows incoming transactions to an address, not outgoing spends
Cryptography	zk-SNARKs; Halo 2 removed the trusted setup with NU5 in May 2022	Ring signatures with ring size 16; FCMP++ upgrade in development, 69% complete on GitHub with no mainnet date
Block time	75 seconds (25 seconds proposed with NU7)	2 minutes
Regulated access	US spot ETF since August 2026; listed on major US exchanges	Delisted by Binance in February 2024 (The Block) and by UAE-licensed venues

What Zcash does better

• A supply you can count. 21 million, same as Bitcoin, which is why a fund can hold it and explain it to a compliance desk. Monero’s tail emission is small and arguably necessary to pay miners forever, but it is still an uncapped supply.
• Privacy you can prove you did not abuse. A Zcash full viewing key lets a holder show incoming and outgoing history to an auditor, a tax adviser or a counterparty without exposing it to the world. Monero’s view key reveals what an address received, not what it spent.
• Access. An ETF on NYSE Arca, custody at a regulated custodian and listings on large exchanges exist because Zcash has a transparent mode those institutions can work with.
• Research depth. Zcash removed the trusted setup that early zk-SNARKs required when NU5 activated on May 31, 2022, per CoinDesk, and the same cryptography now underpins much of the zero-knowledge work across crypto.

What Monero does better

• Everyone is in the crowd. When privacy is optional, the people who use it stand out, and the anonymity set is only as big as the shielded pool. With 29% of ZEC shielded, most Zcash activity is still as public as Bitcoin. On Monero there is no transparent lane to fall back into by mistake.
• No user error. Sending ZEC from a shielded balance to a transparent address, or receiving from an exchange onto a transparent address, is a normal Zcash operation that leaks information. Monero removes the decision.
• A simpler mental model. One pool, one address type, one kind of transaction. Zcash users have to know which pool their coins sit in, and migrations between pools have been needed more than once.

Where they share the same weakness

Both hide amounts, so neither supply can be verified by adding up visible balances the way Bitcoin’s can. Both rely on the soundness of their proofs. Zcash just demonstrated what that means in practice.

The Orchard counterfeiting bug, told plainly

On June 4, 2026 Shielded Labs published a disclosure co-signed by Zcash founder Zooko Wilcox. The facts it states:

• A researcher found an under-constrained element in the Orchard circuit on May 29, 2026, using AI-assisted auditing.
• The researcher wrote an exploit that generated unlimited counterfeit ZEC in a local test environment. It would have worked on mainnet.
• The flaw had been present since Orchard activated in May 2022.
• An emergency fix was deployed on June 1, 2026.
• There is no evidence it was exploited, and Shielded Labs assesses exploitation as unlikely. But, in the disclosure’s words, “there is no definitive way to determine, using only cryptography, whether such exploitation occurred.” The privacy that makes Orchard useful also makes a counterfeit inside it invisible.

Ironwood, the July 28 upgrade, is the answer to that uncertainty. It cannot prove that nothing was minted in the past. What it does is cap the future: whatever is inside Orchard can only leave through a turnstile that refuses to release more than verifiably went in. On October 10, 2026, ZODL’s migration tracker showed about 362,000 ZEC still in the sealed Orchard pool and 4.1 million already in Ironwood.

We include this at length because it is the strongest argument both for and against Zcash in one story. Against: the flaw sat there for four years. For: it was found by the project’s own security research, patched in three days, disclosed in full, and fixed structurally within two months by five independent teams (ZODL, Project Tachyon, Valar Group, the Zcash Foundation and Shielded Labs, per The Block). Judge that record for yourself.

Regulatory risk: one date, several jurisdictions

European Union: 10 July 2027. Regulation (EU) 2024/1624, the EU’s anti-money-laundering regulation, defines “anonymity-enhancing coins” as crypto-assets with built-in features designed to make transfer information anonymous “either systematically or optionally”. The word optionally is why Zcash is in scope despite its transparent mode. Article 79(1) prohibits credit institutions, financial institutions and crypto-asset service providers from keeping accounts “allowing for the anonymisation of the customer account holder or the anonymisation or increased obfuscation of transactions, including through anonymity-enhancing coins”. Article 90 sets the application date: 10 July 2027.

What that means in practice: exchanges and custodians licensed in the EU are expected to stop supporting ZEC and XMR for their customers by that date. What it does not mean: the regulation places obligations on those providers, not on individuals. Holding Zcash in your own wallet, sending it, or swapping it without an intermediary account is not what Article 79 regulates. We say this as a reading of the text, not as legal advice.

United Arab Emirates: already happened. Dubai’s VARA rulebook of 2023 prohibits activities involving anonymity-enhanced cryptocurrencies, as Blockworks reported at the time. When Binance moved UAE users to its locally licensed entity from April 25, 2025, ZEC, XMR, DASH and DCR were dropped, according to Coinedition. Kraken’s own support notice, dated June 1, 2026, halted trading in ZEC and XMR for UAE residents on June 16, 2026 and withdrawals on September 14, 2026.

United States: the opposite direction, for now. The SEC closed its Zcash Foundation inquiry without action and a spot ETF trades on a national exchange. That is the most permissive stance any large jurisdiction has taken on a privacy coin. It is also a stance, not a law, and the ETF holds transparent ZEC at a custodian, which is the version of Zcash regulators are comfortable with.

The quieter risk: transparent-only rails. When Coinbase listed ZEC in 2018 it supported withdrawals only to transparent addresses, per CoinDesk’s report at the time, and that pattern has been common across exchanges. If regulated venues keep ZEC at all, they keep the public half. The shielded half lives in your own wallet or nowhere.

What this means if you hold ZEC, or want to

Put the pieces together. The strongest driver of the rally is more ZEC moving into shielded pools, in users’ own wallets. The strongest regulatory risk is that exchanges in a growing list of jurisdictions will not hold ZEC for you. Both point the same way: the useful way to get in or out of Zcash is from a wallet you control, without an account in the middle.

A decentralized cross-chain swap does that. You pick the pair, see what you will receive with every fee already included, sign in your own wallet, and receive the other coin at an address you choose. There is no sign-up and no ID check, and RUNEBond never takes custody of funds. We explained the mechanism step by step in how to swap crypto without KYC or an account, and the specific steps for Zcash are on the pair pages: swap ZEC to BTC and swap BTC to ZEC.

The candour that makes the rest of this article worth reading applies here too:

• A swap is public. A cross-chain swap uses transparent Zcash addresses. The transactions are visible on both chains, and anyone can look them up. No KYC means no account, not invisibility, and it does not change any tax or legal obligation you have where you live.
• The swap runs on the transparent side. The swap receives ZEC at a transparent address, so sending from a shielded balance is a deshielding transaction, and the ZEC you receive arrives at a transparent address. Shielding it afterwards is your decision, in your wallet.
• Price on large amounts and refunds. A large swap can get a worse price per coin; the quote shows the expected amount for your exact size before you sign. If a swap cannot complete, the coins return to the address they came from, minus network fees, which is why you swap from a wallet you control and never straight from an exchange account.
• Your keys, your responsibility. Nobody can freeze a shielded balance in your wallet, and nobody can recover your seed phrase either. We covered why that trade-off is the whole point in Bitcoin yield without giving up custody.

None of this is financial advice. Zcash is a volatile asset with a documented critical bug in its recent past, a governance split in January and a hard regulatory deadline in Europe. It also has a fixed supply, a working privacy system that more people are choosing to use, and the first privacy-coin ETF in the United States. This article gives you the mechanism and the dates so you can weigh them yourself.

If you decide to move, look at the quote for your amount first: what you receive, what it costs and how long it takes, before you sign anything. Swap ZEC with no KYC and no sign-up on RUNEBond.

This article is educational and is not investment advice. Zcash is a volatile asset and a swap is irreversible once signed. Do your own research before moving any funds.