Winklevoss Asset Services has filed for a Zcash exchange-traded fund that would charge 0.25% annually, setting up a cheaper rival to Grayscale’s ZCSH. Grayscale’s product is currently the only ETF holding ZEC, the privacy-focused cryptocurrency designed to obscure sender details and payment amounts.
The filing arrived on October 6, after a sharp drop in assets at Grayscale’s fund over less than two weeks. If approved, the new product would trade on Nasdaq under the ticker WINK, but it still needs regulatory and exchange clearance before shares can begin trading.
Grayscale’s Zcash ETF lost assets in under two weeks
Grayscale’s ZCSH held $1 billion on September 24. By October 5, assets had fallen to $781.96 million, a decline of about $218 million over that period.
Fund flow data indicates that withdrawals accounted for roughly $97 million of the drop. Cumulative net inflows declined from $306.12 million to $209 million, while the rest of the asset reduction reflected a lower ZEC price.
Investors withdrew money in four of the fund’s last five trading sessions. From September 30 through October 2, daily outflows ranged between $27 million and $30 million. The fund had also posted its first weekly outflow since launch, totaling $93.6 million, according to the source report.
A lower-fee challenger takes shape
The Winklevoss filing proposes a management fee that is one-tenth of Grayscale’s. On a $10,000 position, that would translate to $25 a year for the proposed fund, compared with $250 for ZCSH.
The registration names Nasdaq as the intended listing venue and WINK as the proposed ticker. At the time of the filing, ZEC was trading near $1,342, up 4.8% over 24 hours, according to the source article.
The filing was noted by ETF analyst Eric Balchunas, who said it came exactly 13 years after the first-ever filing for a spot Bitcoin ETF associated with the Winklevoss twins.
Custody, conflicts and sponsor details
Gemini Trust, the crypto custodian founded by Cameron and Tyler Winklevoss, would hold the proposed fund’s ZEC. The filing describes Gemini as an affiliate of the sponsor and flags that relationship as a conflict of interest.
The sponsor, Winklevoss Asset Services, was formed on October 1. The filing says it has no prior experience operating a pooled investment fund.
Winklevoss Capital Fund has indicated interest in purchasing up to $100 million of shares, but the document says that interest is non-binding.
What still needs to happen next
The proposed ETF cannot begin trading unless the US Securities and Exchange Commission declares the registration effective. Nasdaq must also separately approve the listing.
Several operating details remain incomplete in the filing, including the price benchmark, the seed amount and the trading counterparties. For now, Grayscale’s ZCSH remains the only ETF with ZEC exposure, while the Winklevoss proposal moves into the regulatory review process.
Source: beincrypto.com