Grayscale has submitted a fourth amendment to its S-3 registration statement for the Grayscale Zcash Trust, another step in its plan to turn the vehicle into a US spot exchange-traded fund for listing on NYSE Arca under the ticker ZCSH.

If the proposal is approved, the product would become the first US ETF tied to a privacy coin. The filing also outlines how the trust would handle share creation and redemption, and references non-binding discussions that could provide an initial seed investment in ZEC.

Fourth amendment advances ETF conversion plan

The updated filing was made on Aug. 18 and continues Grayscale’s effort to register the Grayscale Zcash Trust for public trading on NYSE Arca. The trust is expected to adopt a new name once the registration statement becomes effective and trading begins.

The proposed fund is designed to hold ZEC, the native token of the Zcash network. Grayscale’s latest amendment does not represent approval, but it does refine the structure of the planned product as the company works through the registration process.

How creations and redemptions would work

According to the amendment, the trust would primarily process creations and redemptions through cash orders. At the same time, authorized participants would be allowed to create shares in-kind by delivering ZEC to the trust.

The filing says in-kind redemptions are not permitted as of the filing date. That means shares could be created with token deposits in some cases, but redemptions would not currently allow holders to receive ZEC directly from the trust.

Trust structure and service providers

The Grayscale Zcash Trust is organized as a Delaware statutory trust and is sponsored by Grayscale Investments Sponsors, LLC. The filing identifies Coinbase as prime broker, while Coinbase Custody Trust Company is named as custodian for the trust’s ZEC holdings.

Bank of New York Mellon is listed as both transfer agent and administrator. These details restate the operational framework Grayscale intends to use if the registration becomes effective and the product begins trading on the exchange.

Potential seed arrangement and market reaction

The filing also references non-binding talks involving DCG International Investments Ltd, an affiliate of Digital Currency Group. Under the discussions described, DCG could purchase shares through an authorized participant in exchange for 200,000 ZEC, providing an initial seed for the fund.

The arrangement remains under discussion and is not presented as final. Following the news, ZEC moved higher and was trading at about $555, according to the source article.

Why the proposal stands out

Zcash is known for using zero-knowledge cryptography to shield transaction details. That privacy-focused design has historically made regulated financial products in this segment more sensitive from a compliance and market-structure perspective, which is part of why the filing has drawn attention.

The next confirmed step is regulatory review of Grayscale’s amended registration statement. Only if the filing becomes effective and the exchange listing proceeds would the trust be renamed and begin trading on NYSE Arca as the proposed spot ETF.

Source: Cryptopolitan