Grayscale Zcash ETF Proposal Sparks Concerns Over DCG Ownership

The US Securities and Exchange Commission (SEC) has received an amended filing from Grayscale for its proposed Zcash ETF, which would carry a 2.5% annual fee.

The new structure aims to address the trust's long-running price-tracking problem by allowing large market intermediaries called authorized participants to create or redeem 10,000-share baskets when the ETF's market price moves away from the net value of the Zcash tokens held by the fund.

Under this system, Grayscale expects that arbitrage would bring the two prices closer together. The maximum premium recorded by the trust was 240%, while its average premium was 53% and its average discount was 19%. The shares closed below NAV on 700 days.

The filing warns that Digital Currency Group could own a majority through DCG International Investments Ltd. and other affiliates, which could create conflicts with other investors.