Zcash gains attention as Grayscale eyes U.S. spot ETF

Grayscale moves to convert Zcash Trust into spot ZEC ETF

Grayscale is pursuing a conversion of its Zcash Trust into a U.S.-listed spot ZEC exchange-traded fund. According to Cointelegraph, the firm submitted a Form S-3 in November 2025 to convert the Zcash Trust (ticker: ZCSH), a move described as potentially the first u.S. product directly tracking a privacy coin.

FinanceFeeds reports the Trust held roughly $196–$200 million in assets at the time of filing and is structured to align its share price with the value of underlying ZEC, net of fees and liabilities. The application positions ZEC exposure within the 1940 Act–adjacent ETF framework used in prior crypto conversions, though approval remains uncertain and subject to SEC review.

Why it matters: Zcash privacy and selective disclosure explained

Zcash combines privacy with auditable transparency. Its “selective disclosure” allows a holder to reveal transaction details to specific parties, such as auditors or tax authorities, without making that information public on-chain.

“Zcash’s privacy features are ‘very interesting,’ especially its ‘selective disclosure’ mechanism,” said Craig Salm, Chief Legal Officer at Grayscale, at Consensus Hong Kong 2026. The construct aims to preserve commercial confidentiality while enabling compliance reporting when required.

Any SEC evaluation will likely focus on investor protection and market integrity, alongside how Zcash’s selective disclosure and viewing keys can support required transparency. The regulatory path is unsettled, and no outcome or timeline is assured.

Analysis from holder.io suggests that, if converted, structural frictions typical of closed-end trusts, such as persistent discounts or premiums, could narrow under an ETF model. Institutional access could improve if the product lists on national securities exchanges, subject to final approvals.

At the time of this writing, ZEC traded near $282.35, up 5.74% over 24 hours, as reported by Bitget News. This price context is informational and not a projection or recommendation. This article is for information only and does not constitute investment advice.

How a spot ZEC ETF would work in practice

Custody, AML/KYC, and handling of shielded addresses

A spot zec etf would hold ZEC with a regulated custodian while fund shares trade in the securities markets. Investor onboarding and intermediaries would apply AML/KYC, and selective disclosure via viewing keys could facilitate audits or regulatory inquiries.

Operational policies would need to address deposits, withdrawals, and any interactions with shielded addresses. The focus is on reconciling privacy features with controls for recordkeeping, tax reporting, and oversight.

What the ETF tracks vs. what it does not provide

CryptoSlate notes the ETF is designed to deliver ZEC price exposure, not privacy tools inside the fund structure. Shareholders do not gain shielded transaction capabilities or private payments by owning ETF shares.

FAQ about Grayscale Zcash Trust

What is the status and timeline of Grayscale converting the Zcash Trust (ZCSH) into a spot ZEC ETF?

Grayscale filed Form S-3 in Nov 2025 to convert ZCSH. SEC review is ongoing and approval is uncertain. No definitive conversion timeline has been announced.

How would a ZEC ETF handle custody, AML/KYC, and shielded addresses in practice?

A regulated custodian would hold ZEC; broker/dealer onboarding enforces AML/KYC; policies would govern shielded-address flows with selective disclosure via viewing keys when required.