Zcash ETF Moves Closer After Grayscale Files Fifth Amendment

TLDR:

• Zcash ETF terms now include the planned ZCH ticker, an NYSE Arca listing and a 2.5% annual sponsor fee after Grayscale filed its fifth amendment.
• BNY Mellon would serve as transfer agent, while Coinbase Custody would safeguard the ZEC supporting continuously issued fund shares.
• The existing Grayscale Zcash Trust held over $260 million when the amendment appeared, giving the conversion an established asset base.
• A potential 200,000 ZEC contribution from a DCG affiliate remains nonbinding, while the SEC has not approved the proposed conversion.

Grayscale has filed a fifth amendment for its proposed Zcash ETF, adding clearer details that move the conversion process forward. The Friday filing names ZCH as the planned ticker and sets a 2.5% annual sponsor fee. It also renames the existing product The Zcash ETF and confirms plans for an NYSE Arca listing. 

The ZEC price jumped about 29% around the disclosure, trading near $740 on Saturday. The filing does not represent SEC approval or confirm a launch date. It instead gives investors clearer terms for the converted Grayscale Zcash Trust. Regulators must still allow its shares to begin trading.

Zcash (ZEC) Price

Zcash ETF filing fixes fee, ticker and operating roles

The amended registration assigns operating roles for the proposed fund. Bank of New York Mellon would serve as transfer agent. Coinbase Custody Trust Company would safeguard the ZEC held for shareholders.

Grayscale also plans to issue an indeterminate number of shares continuously. Sale prices would reference ZEC and the shares’ trading price on NYSE Arca. This structure allows the share count to expand when demand requires new creation baskets.

A listed Zcash ETF could address a recurring weakness of the over-the-counter trust. Its shares can trade above or below their underlying asset value when arbitrage options stay limited. ETF creation and redemption processes help market makers narrow those gaps, although close tracking is never guaranteed.

Investors would gain ZEC price exposure through brokerage accounts without managing wallets or keys. They would own fund shares rather than ZEC itself. Therefore, shareholders could not use the coins for transparent or shielded transfers on the Zcash network.

The 2.5% sponsor fee would create a drag on returns relative to holding ZEC directly. Grayscale would deduct the charge from fund assets, gradually reducing each share’s cryptocurrency entitlement.

The Grayscale Zcash Trust began operating in 2017 and held over $260 million when Friday’s amendment appeared. That existing asset base gives the proposed Zcash ETF a portfolio before any conversion occurs. It also separates this application from a newly seeded product with no operating record.

Grayscale has previously converted cryptocurrency trusts into listed funds. Still, each product requires its own registration review and exchange approval process.

Grayscale Trust conversion still awaits SEC clearance

The fourth amendment disclosed talks involving DCG International Investments, a subsidiary of Grayscale’s parent company. The affiliate may contribute about 200,000 ZEC through an authorized participant in exchange for fund shares.

Those talks remain nonbinding. DCG International could provide more ZEC, contribute less, or abandon the transaction. The filing does not treat the amount as committed launch capital for the Zcash ETF. A changing token price also alters the dollar value attached to any eventual contribution.

Regulatory attention extends beyond the fund’s operating mechanics. Zcash supports both transparent addresses and shielded transactions, which can conceal transaction details. The proposed shares would track the asset’s market value without giving shareholders those payment functions.

If approved, the Zcash ETF would become the first US exchange-traded fund directly tied to a privacy-focused cryptocurrency. That status could test whether regulated securities wrappers can broaden access to assets carrying distinct compliance questions.

The SEC must still allow the registration statement to become effective. NYSE Arca must also have authority to list and trade the shares. A fifth amendment can reflect progress in disclosure work, but the amendment count does not guarantee approval.

Bloomberg Intelligence analyst James Seyffart said Grayscale appeared to be moving closer to conversion. He did not provide an approval date in the post.

Grayscale already offers listed products tied to Bitcoin, Ethereum, Dogecoin and XRP. Adding a Zcash ETF would extend that lineup beyond larger payment and smart-contract assets. The revised filing leaves the SEC timetable and proposed 200,000 ZEC contribution unresolved.

The post Zcash ETF Moves Closer After Grayscale Files Fifth Amendment appeared first on Blockonomi.