Grayscale has submitted its fourth amendment to the U.S. Securities and Exchange Commission to convert the Grayscale Zcash Trust into an exchange-traded fund. Subject to the registration becoming effective, the fund is planned for listing on NYSE Arca under the ticker ZCSH.
The updated filing reveals that DCG International Investments Ltd., a subsidiary of Grayscale parent Digital Currency Group, is discussing a potential purchase of shares representing exposure to approximately 200,000 ZEC. With Zcash trading near $555, the proposed amount equates to roughly $110 million. Grayscale noted that these discussions are nonbinding and that the potential investor could ultimately decide to buy more, fewer, or no shares.
The conversion process would transition the existing over-the-counter Zcash investment vehicle into an ETF structure, continuing to hold ZEC while offering publicly traded shares. According to SEC disclosures, the trust's principal market net asset value reached approximately $155.25 million as of June 30.
Alongside the investment disclosure, the revised registration statement addresses the Orchard vulnerability that affected Zcash earlier this year. The flaw in Zcash's shielded transaction pool could have potentially allowed the creation of counterfeit ZEC without leaving a public record. Although developers found no evidence of exploitation, the privacy properties of Orchard meant they could not definitively rule out hidden inflation.
To address the supply concerns, Zcash developers deployed the Ironwood upgrade on July 28. The upgrade introduced a separate shielded pool and a supply turnstile mechanism designed to prevent more ZEC from leaving the old Orchard pool than had legitimately entered it, effectively sealing the vulnerable pool while permitting withdrawals under strict accounting rules.
Grayscale's latest Zcash filing comes as the asset manager continues managing various altcoin products in its regulatory pipeline. Earlier in August, Grayscale withdrew registration statements for proposed Cardano, Hedera, and Polkadot ETFs, while applications for Zcash, Bittensor, Aave, BNB, and NEAR remained at different stages of review.
