The U.S. Government Is Quietly Holding Zcash — Isn’t That Ironic?

For years, regulators have warned that privacy coins like Zcash enable financial secrecy. Yet new blockchain analysis suggests the U.S. government itself is holding ZEC—a privacy-focused cryptocurrency designed to hide transaction traces. According to Arkham Intelligence, the government controls around $1.5 million worth of Zcash, traced back to assets seized during the AlphaBay darknet takedown in 2017. While officials have not commented, the wallets have been linked to Department of Justice-related activity.

Despite Zcash’s privacy tech, this holding is tiny compared to the government’s massive crypto stockpile: nearly $30 billion in Bitcoin and $187 million in Ethereum, mostly from law enforcement seizures. Still, the contradiction is striking—owning a coin built to resist surveillance while pushing stricter crypto regulation.

Tensions are set to rise on December 15, when Zcash founder Zooko Wilcox, Aleo CEO Alex Pruden, and Wayne Chang (SpruceID) will meet the SEC in a four-hour privacy-focused discussion. SEC crypto task force lead Hester Peirce says the goal is to understand privacy tools without violating civil liberties.

The debate intensified after Arkham claimed it could identify over 53% of Zcash network activity, sparking backlash. Critics argue most of that data comes from transparent transactions, not Zcash’s fully encrypted shielded pool, which remains highly resistant to tracking.

Despite all the controversy, Zcash is one of the best-performing assets of the year, surging over 1,000%, peaking above $700, and now stabilizing near $434. Institutional interest is climbing, with Grayscale filing for a spot Zcash ETF.

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