The annual sponsor fee that will apply after conversion remains blank, leaving the converted fund’s cost to shareholders undetermined.

August 3, 2026

Grayscale Investments has taken another step toward converting one of its older over-the-counter crypto trusts into an exchange-listed fund, submitting a third amendment to the registration statement for Grayscale Zcash Trust (ZEC) on July 31, 2026. On effectiveness, the sponsor intends to rename the vehicle Grayscale Zcash ETF and list its shares on NYSE Arca under ZCSH — the same ticker the shares already carry on OTCQX.

The discount is the point

For advisors already holding the trust, the central consequence is the discount. Shares of the Delaware statutory trust, formed in October 2017, have spent much of their quoted history detached from the value of the tokens behind them. Between October 18, 2021 and June 30, 2026:

• Maximum premium to NAV per share: 240%; average premium 53%
• Maximum discount to NAV per share: 55%; average discount 19%
• Business days closing at a discount: 700
• Discount as of June 30, 2026: 17%
• Discount as of July 29, 2026, with shares at $30.20: 18.07%

Grayscale expects that spread to close. The sponsor anticipates the market price will approximate NAV per share immediately before the NYSE Arca listing and converge with it afterward, producing net creations when shares trade above NAV and net redemptions when they trade below.

The machinery behind the convergence

That expectation rests on plumbing the trust has not had. The redemption program is reinstated on the effective date of the registration statement, and the trust intends to rely on an exemption or other relief from the SEC under Regulation M in order to operate it. Authorized participants will transact in baskets of 10,000 shares, either in kind against ZEC or through cash orders routed by the transfer agent to a liquidity provider — the latter carrying a variable fee that in-kind orders avoid, and therefore a different execution price.

The fee is still blank

One material term is absent. The trust’s only expected ordinary recurring expense is the sponsor’s fee, which accrues daily and is payable in ZEC. The annual rate is left blank in both the offering summary and the glossary of defined terms. Until a later amendment supplies it, the converted fund’s cost to shareholders is undetermined. The sponsor retains discretion to waive all or part of the fee but states it does not presently intend to. Because the fee is settled in tokens, the amount of ZEC represented by each share declines over time, which makes the eventual rate the main determinant of long-run tracking against the index.

A privacy asset, and what that means for pricing

The underlying asset sets this conversion apart from Grayscale’s bitcoin and ether products. Zcash, created in 2016, uses zk-SNARK cryptography to conceal transaction amounts and counterparties in what the protocol calls shielded transactions, while permitting unshielded transactions that remain publicly viewable. That design has drawn sustained exchange and legislative attention:

• Since 2019, ZEC has been removed from venues including Coinbase UK, Bittrex and OKX.
• Binance said in June 2023 it would delist Zcash and other privacy tokens in France, Spain, Italy and Poland, then retracted the announcement.
• In January 2024, Binance applied a monitoring tag to ZEC, signaling global delisting risk.
• Enacted and proposed legislation, including in the European Union, could lead trading platforms to limit listings of privacy-enhancing tokens.

That bears directly on pricing. Since April 1, 2026 the trust has valued its holdings against the CoinDesk Zcash Benchmark Rate, which replaced an earlier CoinDesk Zcash index. As of June 30, 2026 the benchmark drew on Binance, Gemini, Kraken and OKX — two of which, Binance and OKX, are not available to U.S. customers. The trust discloses that further contraction in the number of platforms supporting ZEC would leave the index provider with limited ability to substitute venues, which could skew the reference price.

Concentration in the reference data is visible in the trust’s own figures. Measured from January 1, 2024 through June 30, 2026, Kraken accounted for 23.74% of ZEC volume in the dollar trading pair and Gemini 2.17%, with OKX at 0.03%, for a combined 25.94%. In the ZEC-USDC pair, Binance carried 85.51% and OKX 0.13%.

Scale relative to the token

The trust is sizable relative to its asset. It held approximately 2.3% of circulating ZEC as of June 30, 2026, when supply stood at 16.7 million tokens against a 21 million cap and aggregate market value of $6.7 billion — twelfth among digital assets by market capitalization. Zcash’s 24-hour trading volume was roughly $195.0 million, against $9.2 billion for bitcoin. ZEC confers no governance rights, so the position gives Grayscale no influence over protocol development.

Structure, disclosure status and auditors

Structurally the converted fund will resemble Grayscale’s other listed products: CSC Delaware Trust Company as trustee, BNY Mellon as administrator and transfer agent, Continental Stock Transfer as co-transfer agent, and Coinbase entities as prime broker and custodian. The vehicle will not register under the Investment Company Act, and the sponsor’s position is that it is not a commodity pool subject to CFTC regulation. It remains an emerging growth company, a non-accelerated filer and a smaller reporting company, which keeps it on a reduced disclosure track after listing. Any incidental rights or forked tokens the trust receives will be abandoned rather than sold, so share value will not reflect them and shareholders receive no consideration in exchange.

The incorporated financial statements span a change in auditor. Marcum LLP, which audited the 2023 year, was dismissed on March 1, 2024 — the same day KPMG LLP was appointed. KPMG has audited 2024 and 2025. The trust reports no disagreements with Marcum and no qualification or adverse opinion in its final report.

What still has to happen

Effectiveness is not imminent. Several exhibits are still to be submitted, including the Delaware counsel opinion, the tax opinion and an amendment to the co-transfer agency agreement, and the prospectus remains undated and subject to completion. A delaying amendment leaves the timing with the Commission rather than the sponsor.

The registration statement was signed by Kathryn Masci as a member of the sponsor’s board of managers and interim chief financial officer, alongside chief executive Peter Mintzberg and chief legal officer Craig Salm. Masci moved into the finance role only weeks earlier, when Grayscale restructured its finance leadership on an interim basis. Grayscale Investments Sponsors, LLC has been the trust’s sole sponsor since May 3, 2025, following the reorganization that left it and Grayscale Operating, LLC as separate Digital Currency Group subsidiaries.