[DigitalToday reporter Yoonseo Lee] Asset manager Grayscale is continuing procedures to convert the 'Grayscale Zcash Trust' into a spot exchange-traded fund (ETF).

On Aug. 19 local time, blockchain media outlet Cryptopolitan reported that Grayscale submitted a fourth amended S-3 registration statement for the Zcash Trust to the U.S. Securities and Exchange Commission (SEC) on Aug. 18.

If approved, it would become the first U.S. spot ETF tracking a privacy coin, trading on NYSE Arca under the ticker ZCSH. It would open a channel for stock market investors to access Zcash (ZEC) within a regulated framework.

The key change in the amendment is a refinement of share creation and redemption methods. According to the filing, the Zcash Trust will handle creations and redemptions primarily through cash orders. However, authorized participants can deliver ZEC directly to create shares in-kind. In-kind redemptions are not currently permitted.

The operating structure was also reaffirmed. The product is established as a Delaware statutory trust, with Grayscale Investments Sponsor LLC as sponsor. Coinbase serves as prime broker, and Coinbase Custody Trust Company holds ZEC. Bank of New York Mellon acts as transfer agent and administrator. Grayscale plans to change the trust's name once the registration becomes effective and trading begins.

The amendment also includes discussions of seed funding with an affiliate under Digital Currency Group. DCG International Investments is discussing a plan to purchase shares by delivering 200,000 ZEC through an authorized participant. The talks are not binding.

The filing is drawing attention because Zcash is a cryptocurrency that puts privacy features at the forefront. The Zcash network can obscure transaction details using zero-knowledge cryptography. Regulated investment products have so far taken a cautious stance toward tokens with such privacy features. Against that backdrop, converting the Zcash Trust into an ETF could set a new precedent.

On-chain indicators also showed an expanding trend in demand for privacy. The share of shielded balances among circulating supply rose by about 30 percent to a record high. The size of the network's Orchard pool also increased over 12 months to 4.55 million ZEC from 1.92 million ZEC.

Zcash, however, took a major hit this year on security concerns. Security researcher Taylor Hornby (테일러 혼비) disclosed in mid-2026 a flaw that could have allowed counterfeit ZEC to be issued in the Orchard shielded pool. Soon after the news emerged, the price of ZEC at one point slid to around $299 from $602. Developers later carried out the Ironwood upgrade to detect counterfeit coins.

The ETF push is seen as an attempt to bring into institutional investment products a network that carries both privacy features and security issues. Key points to watch are whether the SEC approves it and whether the cash-focused creation and redemption structure will be reflected unchanged in the final listing plan.