Understanding the governance dispute and the board's findings.
The goal of the Bootstrap board is to protect and support Zcash.
More concretely, while the job of the core team is to minimize the software attack surface of Zcash, the job of the Board of Bootstrap is to minimize the legal and regulatory attack surface of Zcash.
Since the idea of a privatized Zashi was floated, the Board has agreed that there are enormous advantages of transitioning Zashi to new ownership.
But these advantages can only be realized if the transaction follows the legally defined path for a related party transaction between a private company and a public charity.
Failing to follow that path opens up Zcash to a new legal attack surface area.
The Electric Coin Company ("ECC") was established in 2016. In 2020, the owners of ECC donated their shares to a newly formed 501(c)(3) public-benefit nonprofit called Bootstrap. In 2024, ECC released the Zashi wallet.
In October 2025, ZEC started spiking, moving from $70 to $150 in less than one week. In late October, the opportunity for external investment arose, driven by a promoter external to the active Zcash community. The Bootstrap board was generally supportive and let its then CEO Josh Swihart manage the deal.
Between late October and early December, the board received very sparse communications about what was happening. It chased for information but did not receive meaningful documentation until 3 Dec and then 14 Dec (where the information was still incomplete).
On 20 Dec, things rapidly escalated when the board was suddenly given a 1 January deadline to approve a deal. The board worked extremely hard over the holidays but was unable to get across various challenges with the structure, and was unable to obtain concessions from the counterparty in order to get to an agreeable deal.
On 4 January, Josh exited. On 6 January, most of the remaining employees exited. They did not hand over access to any of their company-owned accounts and material.
Under the proposed deal, Zashi and the other assets of Bootstrap would be transferred into a new for-profit entity. The new entity would hire away the team that built Zashi and essentially continue to operate Zashi as a for-profit enterprise for the benefit of those investors.
While we are aware of a public narrative that things are the same and that the devs are just working for another company, it is structurally untrue. The Zashi wallet is being moved into a structure that greatly reduces the number of safeguards that it will be in the public interest; there are precedents of many kinds of software, including wallets, starting off being pro-user and open but ultimately becoming extractive walled gardens over time. Being inside a nonprofit ensured that there were limited incentives to go that direction, and also legal incentives not to. Zashi being inside a for-profit company eliminates those safeguards.
"Since we don't have to make shareholders happy, we can focus on making you happy and always put your privacy and convenience first."
— Mozilla Firefox
For the above reason, Bootstrap has a practical obligation, from the perspective of its goals, to make sure that either (i) the transfer does keep equivalent safeguards, or (ii) it's truly sold off, and in exchange the foundation obtains resources that it can use to keep other parts of the Zcash ecosystem open and free. Realistically, a combination of both is most appropriate.
Many for profits have gone well, but our moral and legal duty as a nonprofit board is to do our due diligence on this and not rush through it.
Further, Josh proposed this deal while acting as both the CEO of Bootstrap and also the would-be founder and CEO of the new for-profit entity. The conflict of interest involved in this transaction makes it more likely to be scrutinized by the IRS and an attorney general.
Zcash and ECC have always taken the approach of risk minimization from a security standpoint. We have taken a similar approach towards legal and regulatory risks. Therefore, the board needs to ensure that whatever deal is approved passes the risk threshold. The proposed deal clearly did not.
Bootstrap has a moral, and legal, responsibility to make sure that its assets are used for the public benefit. If they are sold to a private company, this means that there must be fair and adequate compensation for the $47mn in assets that have been donated to Bootstrap.
The price that was offered to us was $1.5m. It would be paid over 9 years. The assets to be transferred would be the Zashi wallet and a handful of valuable digital assets.
The Zashi wallet has an annual revenue run rate of $4m to $5m, based on the revenue it generated in Q4 2025. This revenue is from fees on NEAR Intents swaps/crosspays. The proposed payment amounts to only $166,666 per year, representing less than 2 weeks of Zashi's run rate revenue.
Clearly, no reasonable board could have approved this as a fair and reasonable deal for Bootstrap. However, the board has been heavily pressured to approve the transaction on these terms.
(The conflicted individuals involved also face material financial risks, potentially in the 8-digits. Refer to the Personal Liability Calculator.)
After reviewing the proposed transaction, the board identified several critical issues that made approval impossible without significant restructuring.
From Oct 4 to Dec 3, the board had no formal documents to review despite repeated requests. The board had no meaningful ability to evaluate the deal.
Once docs arrived on Dec 3, new docs with a different structure were issued on Dec 13. At a Dec 20 meeting, the board was told to complete due diligence and close by Jan 1.
The valuation report was cost-based rather than market-based, and didn't cover all assets being transferred. The valuation process should not be managed by a conflicted party.
The proposed resolutions didn't fulfill IRS Safe Harbor requirements. The process wasn't designed to meet nonprofit transaction standards.
The board received multiple threats to fork the project if the deal wasn't signed on the promoter's timeline, despite clear legal problems.
The conflicted CEO used his position as CEO of the seller org to conduct a process resulting in him being CEO of the buyer org, without meaningfully soliciting input from the board.
OpenAI's restructuring drew intense scrutiny from attorneys general, former employees, and public interest groups over concerns about conflicts of interest and fair valuation of charitable assets. We must learn from this example.
The proposed deal, in its last state, introduces new vulnerabilities for politically-motivated attacks on Zcash. Any of its donors could sue. The transaction could be unwound—Zashi would have to be transferred back to ECC. These factors jeopardize the entire Zcash ecosystem, not just the parties to the transaction.
We do not doubt that those who proposed this transaction believed it was the right path forward for Zcash. They were following norms that are standard among tech startups. Their commitment to the project is real, and their frustration with the constraints of nonprofit governance is understandable.
But good intentions do not satisfy legal requirements, and urgency does not excuse a flawed process.
Following the resignations, various concerns were raised publicly. We have prepared detailed, point-by-point responses.
The board received no formal documents until Dec 3, despite requesting them since Oct 4. The board cannot evaluate what it hasn't received.
The board followed legal counsel's advice and IRS requirements. Refusing to approve a non-compliant transaction is the board's fiduciary duty.
The valuation was cost-based, not market-based, and didn't cover all assets. It was managed by the conflicted party who stood to benefit.
We are committed to stewarding the Zcash mission with integrity, transparency, and adherence to the legal and fiduciary obligations entrusted to us.
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