Zcash group starts lobbying U.S. lawmakers to push crypto policy

A Zcash-focused advocacy group has registered to lobby the U.S. government on crypto market rules, taxation, financial privacy and developer protections, with its federal registration effective Oct. 1.

The U.S. Lobbying Disclosure Act filing shows Pretty Good Policy for Zcash, or PGPZ, registered as an organization employing an in-house lobbyist and named Executive Director Divij Pandya as the only person expected to lobby on its behalf. The filing describes the group’s work as “Zcash ecosystem development, developer protections, and financial privacy.”

Three legislative items are specifically listed. They are H.R. 3633, the Digital Asset Market Clarity Act, the Aligning Digital Assets with Principles of Taxation Act, and the Digital Asset Tax Certainty Act.

Zcash advocacy now has a formal Washington presence

PGPZ emerged in June from Pretty Good Policy for Crypto, a policy initiative originally developed by Electric Coin Co. The earlier project held recurring Washington roundtables for crypto policy professionals and organized a congressional briefing on privacy-enhancing technologies in 2023.

PGPZ founder Paul Brigner has said the new organization is intended to give Zcash a dedicated policy voice. Speaking about the initiative, he said the goal was to ensure Zcash has “serious, organized, and credible policy engagement in Washington.”

The group’s own site describes PGPZ as an independent policy organization focused on helping policymakers and regulators understand privacy-preserving digital money. Its stated areas of work include financial privacy, developer protections, public education and responses to legislation or regulation affecting Zcash.

PGPZ is not an official arm of the Zcash Foundation. Its website says the organization operates independently and is not affiliated with or endorsed by the foundation.

The registration puts Zcash into an active Washington lobbying field already occupied by larger crypto companies. Coinbase’s $1.07 million first-quarter lobbying push around the CLARITY Act and crypto legislation showed how market-structure policy has become a major focus for digital-asset businesses.

CLARITY Act remains one of PGPZ’s main targets

H.R. 3633 would create a federal market structure for digital commodities and divide regulatory responsibilities between the Securities and Exchange Commission and Commodity Futures Trading Commission.

The Senate Banking Committee advanced its version of the legislation by a 15-9 vote in May after months of negotiations.

Progress slowed in September. The Senate recorded a 49-50 vote against invoking cloture on the motion to proceed to H.R. 3633 on Sept. 15. Sixty votes were required. A motion to reconsider the vote was entered afterward.

PGPZ’s grant application says developer liability, anti-money-laundering rules, sanctions, privacy and financial surveillance are among the policy areas it plans to monitor. The group intends to propose amendments or other legislative language where it believes rules could affect privacy-preserving technology.

Developer protection is particularly relevant to Zcash because its software uses privacy technology that can be deployed through noncustodial applications. PGPZ says it plans to support clear rules and safe harbors for developers and maintainers of noncustodial privacy software.

The topic has become part of a wider Washington debate around software developers. Crypto.news previously covered a separate political effort seeking protections for blockchain and DeFi developers as lawmakers considered how existing financial laws apply to software creators.

Two crypto tax bills are included in the lobbying filing

Tax policy makes up another part of PGPZ’s registered agenda. The Digital Asset Tax Certainty Act, H.R. 10357, was introduced on Sept. 14 to change the federal tax treatment of digital assets. Government records describe the bill as legislation to reform provisions of the Internal Revenue Code covering crypto.

The House Ways and Means Committee approved the amended measure on Sept. 16 by a 38-5 vote and ordered it favorably reported to the House.

Committee materials say the proposal addresses issues including mining and staking, reporting rules and tax treatment intended to bring digital assets closer to existing financial-asset rules.

The other tax proposal named in PGPZ’s federal filing is the Aligning Digital Assets with Principles of Taxation Act, known as the ADAPT Act. Sen. Steve Daines introduced that proposal on Sept. 30, describing it as legislation intended to establish clearer digital-asset tax rules and address areas where blockchain transactions differ from traditional financial activity.

PGPZ has not disclosed specific amendments it wants for either tax bill in its federal registration. The form lists them as current or anticipated lobbying issues without stating whether the organization supports every provision.

$750,000 grant will fund the first year

Zcash Community Grants approved PGPZ’s $750,000 funding request on Aug. 31 after reviewing its one-year operating plan. Paul Brigner, who serves on the grants committee and helped establish PGPZ, recused himself from the discussion.

The grant application allocates $400,000 for operating costs, staffing and professional services. Another $125,000 is set aside for administrative support through the Financial Privacy Foundation, while $120,000 covers legal, lobbying, tax, accounting and compliance support.

Policy events and workshops receive $25,000, with another $25,000 budgeted for travel, conferences and congressional visits. The remaining funds cover government affairs tools, research, communications and a contingency reserve.

PGPZ’s application specifically bars grant money from being used for campaign contributions, partisan election activity, political donations or promoting the market price of ZEC. It says the organization will focus on conditions affecting the Zcash ecosystem instead of commercial interests belonging to one company.

Zcash has experienced other U.S. regulatory developments this year. SEC closed its Zcash Foundation investigation without enforcement action in January after a review that began in 2023.

Grayscale later launched the first U.S.-listed spot Zcash ETF in August, bringing a privacy-focused cryptocurrency into a regulated exchange product. The Zcash ETF launch on NYSE Arca followed the closure of the SEC probe earlier in the year.

PGPZ plans congressional meetings next

PGPZ said in its Sept. 30 project update that its board had been seated and its federal lobbying registration had been filed. The organization’s IRS tax-exempt application remained in progress with legal counsel at that point.

Its first three-month plan calls for at least 15 introductory meetings with policymakers, educational material for congressional offices and at least one briefing or workshop. The application later sets targets for policy briefs, regulatory submissions and repeat engagement with government offices.

An Oct. 14 Washington fly-in and Cypherpunk Policy Dinner are among the next scheduled activities. PGPZ said the fly-in will bring ecosystem representatives into meetings with Congress and potentially regulators to discuss Zcash-related policy issues.

The group is conducting that policy work as Zcash developers prepare a separate technical milestone. Zcash developers have targeted Nov. 5 for the NU7 mainnet upgrade, with testnet activation scheduled for Oct. 6 and a final mainnet decision expected later in October.