Grayscale Files First U.S. Spot Zcash ETF With SEC Approval Push

• Grayscale seeks SEC approval to convert its Zcash Trust into the first U.S. spot ETF for a privacy coin.
• Zcash surged after the filing as institutional interest in privacy-focused crypto assets continued increasing fast.
• Privacy features in Zcash still raise custody, auditing, and compliance challenges for regulated ETF products.

Grayscale Investments filed with the U.S. Securities and Exchange Commission on May 8 to convert its Zcash Trust into a spot ETF. If approved, the product would become the first spot exchange-traded fund tied to a privacy-focused cryptocurrency, following reports that the SEC ended its review of privacy coins without enforcement action against Zcash-related entities.

**Zcash ETF Filing **

Grayscale’s proposed conversion follows the same structure previously used for its Bitcoin and Ethereum investment products. The company’s Zcash Trust currently manages more than $196 million in assets.

The filing arrived as institutional interest in privacy-focused cryptocurrencies increased. Multicoin Capital co-founder Tushar Jain disclosed that the hedge fund began building a large ZEC position in February.

Jain described Zcash as a macro hedge play amid growing focus on financial surveillance and digital privacy infrastructure.

Following the ETF filing, Zcash rallied sharply and briefly approached the $600 level. The token also climbed into the top 15 cryptocurrencies by market capitalization after gaining more than 1,000% year-to-date.

Privacy Features Remain a Key Issue

Zcash launched in 2016 through Zerocoin Electric Coin Company with privacy-focused transaction features. According to market data, shielded transactions now account for roughly 30% of Zcash network activity.

However, those privacy tools continue creating challenges for institutional products. Around 20% to 25% of Zcash supply reportedly sits in encrypted wallet addresses.

That structure complicates custody requirements, auditing standards, and proof-of-reserves reporting typically required for ETF products. Most existing crypto ETFs rely on transparent blockchain wallet systems for compliance purposes.

Despite those concerns, market participants viewed the SEC’s reported decision to close its privacy coin review without enforcement action as a reduction in regulatory uncertainty surrounding Zcash.

Grayscale Expands Crypto ETF Strategy

The Zcash filing marks Grayscale’s latest attempt to expand its crypto ETF lineup beyond Bitcoin and Ethereum products. In recent months, the company also pursued filings tied to XRP, Dogecoin, Solana, Cardano, and NEAR Protocol.

The filing also arrives during broader competition among asset managers seeking regulated crypto investment products in the United States.

If regulators approve the product, the Grayscale Zcash ETF would establish the first regulated spot ETF focused on a privacy coin within U.S. financial markets.