Grayscale applies for Zcash ETF with high fee

Grayscale Investments has filed a series of amendment notices with U.S. regulators with the aim of converting its existing Zcash Trust into an exchange-listed, asset-based ETF under the anticipated ticker symbol ZCSH. According to the filing documents, as referenced by CryptoSlate, the planned annual fee is set at 2.5 percent.

Coinbase Custody is listed as custodian, while BNY Mellon will serve as administrator. Grayscale also states that the company voluntarily intends to use the entire sponsor fee for up to twelve months to support marketing and initiatives related to the Zcash network — though this is not a legally binding obligation.

At 2.5 percent annually, the Zcash ETF would cost investors ten times more than a comparable Bitcoin ETF from BlackRock
Grayscale to charge 2.5% fee for Zcash ETF — DCG could secure 34% - Bilde 1

DCG could become a major shareholder via ZEC contribution

A particularly notable aspect of the filing concerns parent company DCG International's potential ownership stake in the fund. Based on a non-binding transaction assessed at a June 30 snapshot, a contribution of 200,000 ZEC would give DCG International a stake of approximately 34 percent of the expanded fund, according to CryptoSlate.

This raises legitimate questions about conflicts of interest: DCG is the parent company of Grayscale, and such a large ownership position held by a single, closely related party could create imbalances in the fund's governance structure. It is worth emphasizing that the contribution is described as non-binding, and the final ownership structure may differ.

2.5%
Planned annual fee (ZCSH)
34%
DCG International's potential ownership stake
Grayscale to charge 2.5% fee for Zcash ETF — DCG could secure 34% - Bilde 2

Far more expensive than Bitcoin and Ethereum competitors

The difference in fee structure is substantial compared to other crypto products on the market. Research gathered by 24markets shows that BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's FBTC both charge 0.25 percent per year, while low-cost alternatives from Ark/21Shares and Bitwise come in at 0.21 and 0.20 percent, respectively.

The comparison is admittedly not entirely fair: Zcash is a far less liquid and more niche asset than Bitcoin, and higher operating costs are to be expected. Grayscale's own Ethereum Trust (ETHE) also charges 2.5 percent — but there, staking returns can partially offset the fee differential. No such offset is described for the Zcash product.

Bloomberg Intelligence analyst Eric Balchunas has previously noted that Grayscale's fee structure may make its products unattractive to many investors, given the substantially lower costs offered by competitors.

Zcash: privacy and regulatory risk

Zcash differs from Bitcoin in that users can choose between transparent and "shielded" transactions, with the latter encrypting the sender, recipient, and amount via zk-SNARKs technology. Despite this, a significant share of ZEC activity still takes place through transparent addresses.

Privacy coins have generally faced a challenging regulatory environment. Binance, OKX, and Huobi have all delisted or restricted trading of Zcash at various points. The fact that the SEC concluded its investigation of the Zcash Foundation in January 2026 without enforcement action has, however, been interpreted as a positive signal for the sector.

In June 2026, a serious security vulnerability was uncovered by security researcher Taylor Hornby using artificial intelligence. The flaw could potentially have enabled undetected counterfeiting of ZEC. According to founder Zooko Wilcox-O'Hearn, the vulnerability was patched before it was made public, and a follow-up audit conducted under Anthropic's Mythos system found no new critical flaws.

Investors should carefully consider the cost level

As with all funds carrying high ongoing costs, a fee of 2.5 percent will have a significant long-term impact on returns. For investors seeking direct exposure to Zcash, purchasing ZEC directly through an approved crypto exchange may prove to be a more cost-effective alternative — provided they are willing to manage their own key custody.

The potential DCG ownership stake and the high fee rate mean that professional investors should read the prospectus carefully and monitor further regulatory disclosures ahead of any potential ETF approval.