Wednesday, October 28, 2020

Zcash’s Electric Coin Company Shifts to Non-Profit Status Following Stockholder Vote

Must Read

NYSE’s former regulation head takes crypto job at Andreessen Horowitz

A senior regulation executive at the world’s largest stock exchange is moving into the cryptocurrency industry.Anthony Albanese, a former chief regulatory officer at the...

Malaysian Securities Commission issues revised digital asset guidelines

The Securities Commission Malaysia has issued revised guidelines governing digital assets, effective as of Oct. 28. These are intended to regulate initial exchange offerings,...

ConsenSys collaborates with Banque de France digital euro partner

Ethereum software firm ConsenSys has just sealed its sixth central bank digital currency project. On Oct. 28, the blockchain organization announced that it will be...

MAJOR BITCOIN BUY SIGNAL FLASHES! INSANE CRYPTO FOMO STARTING! [Do Not Miss This!]

Bitcoin flashes a major buy signal! Insane FOMO is starting! 👀 BLOCKFI $275 https://blockfi.mxuy67.net/c/2040095/907782/10568 🔥 WEALTH MASTERY ►► https://cryptolark.co/WEALTHMASTERY 👨‍🎓 COURSES FOR BEGINNERS 👨‍🎓 👉 CRYPTO EXPLAINED...

The technical firm behind privacy cryptocurrency zcash (ZEC) is transitioning to a non-profit, called the Bootstrap Project, after a majority of shareholders elected to donate their holdings in the company.

“A majority of the investors and owners have informed us of their generous willingness to do this in support of our shared mission to empower everyone with economic freedom,” the Electric Coin Company (ECC) said in a blog post.

The stockholders’ donation comes as international governments have looked increasingly askance at encryption-backed technologies such as privacy coins and wallets. 

The ECC will continue operating under the same business structure, with Bootstrap acting as an umbrella firm of sorts. Bootstrap will be helmed, at least initially, by the ECC’s board of directors, zcash creator and ECC CEO Zooko Wilcox said in a Friday phone interview. The Zcash network is maintained by the ECC, independent developers and the Zcash Foundation.

A date for the ECC’s donation to Bootstrap has not been specified, but is aimed for around the network’s November hardfork, Canopy. The ECC has 24 investors, including Paradigm Capital co-founder Fred Ehrsam and venture capital firm Pantera Capital.

Practically speaking, the donation will free up cash flows for the ECC, which has continued to operate in the red regardless of a 160% year-to-date increase in the price of ZEC.

Under the Zcash founders’ agreement, the ECC receives 5% of miner revenue for developing the encryption tech backing the cryptocurrency. The ECC’s portion of future mining revenues will increase to 7% under Canopy, as agreed upon in February’s Zcash Improvement Proposal (ZIP) 1014.

Yet at a higher level, the donation will allow the ECC to more fully embrace a central plank in ZIP 1014 – that of all future mining revenue furthering zcash’s potential as an asset, and not enriching founders or early investors. Those involved in the project’s 2016 launch garnered 15% of mining revenue under the old scheme.

Outside observers suggest the move may be in keeping with the progressive decentralization ethos designed to keep regulators at bay. Deal Ninja attorney Gabriel Shapiro told CoinDesk the ECC’s shift to non-profit status was “potentially preferable to the status quo muddle of having a non-U.S. ‘foundation’ and a U.S. ‘development company’ with unclear rules of engagement between them.”

Wilcox said the ECC transition to a non-profit was “in alignment” with the community’s stipulations.

Pantera Capital’s Franklin Bi told CoinDesk in a phone call that the firm opted to donate its ECC shares because it was in the best interest of the zcash community. “[It’s] less about the tax benefit, but more so about the community,” he said.

Bi further said Pantera has never sold any of its ZEC holdings.