Is Zcash a legitimate privacy focused project, or is it compromised?
I don’t pretend to know the answer for definite, but it’s a valid question.
Below let’s look at some red flags regarding ZCash:
1) ZCash was developed from Zerocash, which was funded by the the US & Israeli governments
Zerocash was the precursor to ZCash:
Make of the funding situation what you will, all I know is that it happened.
Then, looking further at the authors of Zerocash, we can see that some continued their involvement once it became known as ZCash:
- In 2018 Eli Ben-Sasson (of the Technion Institute in Israel) and Alessandro Chiesa (mentioned above in the zerocash screenshot) apparently formed “Starkware Industries” which ZCash then invested in (source).
- As of 2025, Christina Garman is still involved. She’s on the board of directors (link) of Bootstrap Project, who are the parent company of Electric Coin Company (source), who in turn are the main developers of Zcash.
2) Original Trusted Setup Issues
One of the original trusted setup participants, Peter Todd (above) warned in his blog post:
- “It is IMPOSSIBLE for myself and the other participants to prove to a third party that we did not collude to keep the secret key”
- and “Until the software and deterministic builds are audited, the entire ceremony is a bunch of crypto hocus pocus that means nothing”
Granted, he updated the blog post to say:
“The original trusted setup is pretty much no longer relevant as the underlying crypto has been upgraded (it turned out to be broken for an entirely different reason)”
An interesting bit of information related to the trusted setup is that Edward Snowdon was one of the six participants, although he took part under the pseudonym John Dobbertin (source).
3) The Centralised Dev Fund
With cryptocurrencies like Bitcoin and Monero there is no “dev fund” to centralise things.
However, with ZCash they’ve had a “development fund” since the genesis.
The Electric Coin Company (ECC) was earning a portion of the 20% dev fund from it’s genesis in 2016 to 2024.
The first 4 years emitted 50% of the total token allocation.
Whilst ZCash are claiming to decentralize, their current proposal is that ECC will compete for 12% of the 20% dev fund, based on user voting.
However, it’s noteworthy in ZIP-0271 (https://zips.z.cash/zip-0271) that ECC would be 1 of the 2/3 multisig threshold signers controlling the lockbox containing 12% of the block reward.
4) The money printing bug
Whilst it’s not unique to Zcash it’s worth being aware that Zcash had an inflation bug that existed “for years” until it was patched in 2019 by a Zcash Company cryptographer; Ariel Gabizon of the Weizmann Institute in Israel.
The electric coin company write-up is here.
They note: “We have found no evidence that the vulnerability was discovered by anyone else or that counterfeiting occurred”
Roundup
As a fan of privacy enhancing technology I tend to think the more projects in the space, the better.
However, the reality is that not all projects are going to be legit.
Whether Zcash is or not, I don’t know, but it seems to make sense to highlight the red-flags so that others can form an educated opinion.
When I’ve got further time I’ll add more.
Let me know your thoughts in the comments.