Grayscale Zcash Trust is moving closer to becoming a United States spot exchange-traded fund after Grayscale filed a fourth S-3 amendment.
The August 18 filing outlines plans for the trust to trade on NYSE Arca under ticker ZCSH if approved.
Approval would make it the first American ETF tied to a privacy coin, offering regulated stock-market exposure to Zcash.
ZEC gained more than 9% after the filing became public, trading around $555, according to CoinMarketCap data.
Fourth Amendment Updates Fund Structure
The amended registration statement explains how shares would be created and redeemed once the proposed fund begins operating.
Most creations and redemptions would be processed through cash orders, according to the filing.
Authorized participants could also create shares in-kind by delivering ZEC directly to the trust.
However, in-kind redemptions were not permitted as of the filing date.
The vehicle is a Delaware statutory trust sponsored by Grayscale Investments Sponsors, LLC.
Coinbase serves as prime broker, while Coinbase Custody Trust Company holds the ZEC.
The Bank of New York Mellon acts as transfer agent and administrator.
Grayscale plans to rename the trust after registration becomes effective and its shares begin trading.
DCG Affiliate Discusses 200,000 ZEC Seed
The amendment also details non-binding discussions involving DCG International Investments Ltd, an indirect subsidiary of Digital Currency Group.
Under the proposed arrangement, the affiliate could purchase shares through an authorized participant by contributing 200,000 ZEC.
The potential seed commitment would support conversion of the existing trust into an exchange-traded product.
Demand for the current trust has increased in recent months.
In April, ZCSH averaged about $1.7 million in daily trading volume, more than double March’s level.
The increase has been viewed as evidence that institutional interest in privacy-focused digital assets remains present.
Zcash Privacy Features Define ETF Milestone
ZEC is the Zcash network’s token, allowing users to shield transaction details through zero-knowledge cryptography.
Regulated investment products have been cautious toward privacy-focused assets, making the proposed conversion a first for the United States market.
Shielded ZEC balances also climbed to nearly 30% of circulating supply, reaching a record level.
The Orchard pool expanded from 1.92 million ZEC to 4.55 million ZEC over twelve months, according to The Block.
Zcash faced a major security scare in June after researcher Taylor Hornby disclosed an Orchard pool flaw.
The vulnerability could have allowed an attacker to create counterfeit ZEC.
The token fell from $602 to nearly $299 after the disclosure.
Developers patched the flaw within days and said they found no evidence it was exploited.
They later introduced the Ironwood upgrade to help detect counterfeit coins.
A regulated ETF would expose investors to Zcash’s privacy-focused network.
