Grayscale Files for World's First Zcash-ETF

Grayscale Investments has submitted a Form S-3 filing with the U.S. Securities and Exchange Commission (SEC) to register a new spot exchange-traded fund.

If approved, the product would become the first-ever spot ETF backed by a privacy-centric cryptocurrency available on the public market.

Grayscale’s decision follows reports that the SEC has concluded a long-running probe into privacy coins without taking enforcement action. This effectively dismantles the primary legal hurdles that have stymied such products for years.

Previously, regulators expressed concern that Zcash’s anonymity features could facilitate illicit activity; however, institutional sentiment appears to be shifting.

On May 6, Multicoin Capital co-founder Tushar Jain confirmed that his crypto fund has been aggressively accumulating ZEC since February. The fund views the asset as a "macro hedge", a tool for capital protection against global economic volatility.

Fund structure

The restructured fund, named the Grayscale Zcash Trust ETF, is slated to trade on NYSE Arca under the ticker ZCSH.

The fund’s architecture involves issuing shares in blocks of 10,000. Currently, Grayscale plans to handle all creation and redemption operations exclusively in cash. The ETF’s objective is to closely track the price of ZEC, utilizing the CoinDesk Zcash Price Index (ZCX) for valuation, net of fees and expenses.

Grayscale has set an annual management fee (Sponsor’s Fee) of 2.5%. Coinbase Custody Trust Company will serve as the digital asset custodian.

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