Grayscale Files Fifth Amendment for Proposed Spot Zcash ETF
Key Takeaways
- •Grayscale wants to rename its Zcash Trust as The Zcash ETF and list it on NYSE Arca under the ticker ZCH.
- •The proposed fund would charge a 2.5% annual sponsor fee, which is above the fee range of most major U.S. spot crypto ETFs.
- •Bank of New York Mellon would serve as transfer agent, while Coinbase Custody Trust Company would hold the Zcash assets.
- •The trust currently holds more than $260 million, and a Digital Currency Group subsidiary has discussed contributing 200,000 ZEC.
- •No privacy-coin ETF is currently traded in the United States, and the proposal still needs SEC review before listing.
Grayscale Files Fifth Amendment for Proposed Spot Zcash ETF
Grayscale Investments has moved a step closer to launching the first U.S. spot exchange-traded fund tied directly to Zcash, filing its fifth amendment with the Securities and Exchange Commission on Friday. The update advances the conversion of Grayscale's existing Zcash Trust into a conventional ETF structure, which would allow investors to gain regulated exposure to the privacy-focused cryptocurrency through traditional brokerage accounts.
Zcash ($ZEC) is a privacy-oriented blockchain launched in 2016 that relies on zero-knowledge-proof technology known as zk-SNARKs, which lets users shield transaction details such as sender, recipient, and amount. Unlike fully opaque privacy networks, Zcash also supports ordinary transparent transactions, giving users a choice between public and shielded transfers. It ranks among the longest-established digital assets in the privacy-coin category.
New Structure and Key Details
Under the proposed changes, Grayscale plans to rename the trust The Zcash ETF and list it on NYSE Arca, where it would trade under the ticker ZCH. The fund would charge investors an annual sponsor fee of 2.5%, well above the roughly 0.2% to 1.5% charged by most major U.S. spot crypto ETFs today.
Bank of New York Mellon is slated to handle transfer-agent duties for the fund, while Coinbase Custody Trust Company would safeguard its Zcash holdings. Grayscale also expects to issue shares continuously at prices linked in part to $ZEC. The trust currently holds more than $260 million in assets.
Growing Institutional Interest
The latest filing follows discussions involving a potential 200,000 $ZEC contribution from a Digital Currency Group subsidiary, meaning the proposed fund could enter the market with substantial cryptocurrency backing. Grayscale itself operates under the Digital Currency Group umbrella.
Grayscale already provides crypto ETFs for major assets such as Bitcoin, Ethereum, Dogecoin, and XRP. The firm converted its flagship Bitcoin Trust into a spot ETF after U.S. regulators approved spot Bitcoin funds in January 2024, a milestone that paved the way for a broader range of exchange-traded crypto products. A Zcash ETF would extend regulated exposure into the privacy-focused segment of the digital asset market, a segment that has faced friction elsewhere: global standard-setters such as the Financial Action Task Force have flagged privacy-enhancing tokens as money-laundering risks, and major exchanges including Binance and OKX have delisted or restricted privacy coins in some markets. No privacy-coin ETF currently trades in the United States.
As with any proposed fund, the product must complete the SEC's registration and review process before it can list and begin trading on NYSE Arca. Successive amendments of this kind are a routine part of that process as issuers refine their disclosures, and the SEC retains discretion to approve, delay, or decline the application.
Sources: CryptoNewsNet | Coin Edition
