Grayscale proposes 2.5% fee for Zcash ETF with possible 34% DCG stake

Grayscale proposes converting its existing Zcash trust into an ETF. The proposed ETF would trade on NYSE Arca under the ticker ZCSH if the Aug. 21 SEC amendment becomes effective. The sponsor fee would accrue daily at an annual rate of 2.5% and would be paid in ZEC. The fee would reduce the tokens represented by each share over time. Grayscale intends to use fees received during the first 12 months for trust marketing and initiatives supporting Zcash development, marketing and education. That plan is voluntary and revocable. A DCG affiliate could receive about 34% of the enlarged fund under one calculation involving 200,000 ZEC. The calculation assumes no other creations, redemptions or changes to the share ratio. DCG International Investments Ltd. and other affiliates could own a majority, but discussions with DCG International remain nonbinding. ZCSH recorded a maximum 240% premium to net asset value during the stated historical period. It also recorded a maximum 55% discount. ZCSH shares closed below net asset value on 700 days. Authorized participants would create or redeem 10,000-share baskets when ZCSH moves away from the value of the ZEC held by the fund. Limited liquidity, suspended creations or redemptions, cash-order constraints and concentrated ownership could disrupt tracking and trading. The registration remains preliminary, and the securities cannot yet be sold under it.