Grayscale is taking steps that, if successful, will convert the Zcash Trust into an American exchange-traded fund, trading on the New York Stock Exchange Arca under the ticker ZCSH.
The latest step came on August 18, when the digital asset-focused investment platform filed a fourth amendment to its S-3 registration statement for the Grayscale Zcash Trust ($ZEC), paving the way for further action.
If approved, the product would be the first U.S. ETF to provide stock market investors with regulated access to $ZEC.
What Changes Were Made in the Fourth Amendment?
The document, filed with the Securities and Exchange Commission (SEC), outlines the procedure for creating and redeeming shares of the trust.
According to the S-3/A form, the trust will conduct both creation and redemption of shares primarily via cash transfers, while also providing authorized participants the option to create shares in-kind by delivering $ZEC.
As of the filing date, in-kind redemptions of assets are not permitted.
The trust is a Delaware statutory trust, sponsored by Grayscale Investments Sponsors, LLC.
Coinbase serves as the primary broker, with Coinbase Custody Trust Company holding the $ZEC. The Bank of New York Mellon acts as the registrar and administrator, the document states.
Upon the registration's effectiveness and the commencement of share trading on the exchange, the trust will be renamed by Grayscale.
DCG Subsidiary May Seed the Fund with 200,000 $ZEC
The amendment also discloses non-binding discussions between the sponsor and DCG International Investments Ltd, an indirect subsidiary of Grayscale's parent company, Digital Currency Group.
Under the discussed arrangement, DCG International Investments would be able to purchase shares through an authorized participant by delivering to it 200,000 $ZEC.
Why a Privacy-Focused ETF Would Be a First of Its Kind
$ZEC is the native token of the Zcash network, which allows users to obscure transaction details using zero-knowledge cryptography.
Regulated investment products have been wary of privacy-enhancing tokens like $ZEC, which is why converting the Zcash Trust into an exchange-traded fund would be a breakthrough.
Within 24 hours of the document's publication, the price of $ZEC rose by over 9%. Currently, according to CoinMarketCap data.
Demand for the trust's existing shares has been growing for several months. In April, the average daily trading volume for ZCSH was approximately $1.7 million, more than double the March level. This growth is seen as a sign that institutional investor interest in privacy-preserving assets remains strong.
Over the same period, the share of $ZEC held in shielded balances grew to nearly 30% of the total supply in circulation, a record high. According to The Block, the network's Orchard pool grew from 1.92 million to 4.55 million $ZEC over twelve months.
The Privacy Coin Is Still Recovering from a Major Shock
Despite some gains, this year has been challenging for Zcash. After security researcher Taylor Hornby discovered a vulnerability in the shielded Orchard pool in mid-2026, which could have allowed an attacker to create counterfeit $ZEC, some investors lost faith in the token.
The price of $ZEC dropped from $602 to nearly $299 when news of the issue emerged in June. However, developers patched the vulnerability within days. They stated they found no signs of the vulnerability being exploited and conducted the Ironwood upgrade to detect counterfeit coins.
A regulated ETF built on the same network would provide traditional investors access to an asset whose privacy policy works both ways.
end-content
