Grayscale Zcash Trust (ZEC) is a Delaware Statutory Trust that holds Zcash (ZEC) and issues shares representing fractional undivided beneficial interest in the Trust to provide investors with exposure to the digital asset. The Trust’s purpose is to hold ZEC and create and issue Shares in exchange for deposits of ZEC from accredited investors. The Shares are quoted on OTC Markets Group Inc.’s OTCQX ® Best Market under the ticker symbol “ZCSH.” The Trust operates as a passive investment vehicle seeking to reflect the value of ZEC held by the Trust, less expenses and liabilities, based on the Index Price. As of December 31, 2025, the Trust holds approximately 2.4% of the ZEC in circulation.
The Trust generates revenue through the Sponsor’s Fee, which accrues daily at an annual rate of 2.5% of the NAV Fee Basis Amount and is payable in ZEC to the Sponsor. The Sponsor is obligated to pay certain expenses on behalf of the Trust, including marketing, administrator, custodian, transfer agent, trustee, legal, audit, regulatory, printing, mailing, website maintenance, and license fees, up to $600,000 per fiscal year for certain categories. The Trust does not seek to generate returns beyond tracking the price of ZEC and does not utilize leverage, derivatives, or similar arrangements. Revenue is not derived from the sale of ZEC or Incidental Rights under normal operations, though such assets may be sold to pay Sponsor’s Fee or Additional Trust Expenses.
The company operates through the following segments:
- Sponsor: Grayscale Investments Sponsors, LLC serves as the Sponsor of the Trust and is responsible for the day-to-day administration, including preparing reports, processing creation orders, calculating and publishing NAV and NAV per Share, selecting service providers, and instructing the Custodian to transfer ZEC to pay fees and expenses. The Sponsor also pays Sponsor-paid Expenses as partial consideration for receiving the Sponsor’s Fee from the Trust. The Sponsor may select different index providers or calculate the Index Price using a cascading set of rules if the Index Price becomes unavailable.
- Custodian: Coinbase Custody Trust Company, LLC serves as the Custodian of the Trust and controls and secures the Trust’s Digital Asset Account using offline storage or cold storage mechanisms to protect private key shards. The Custodian allows ZEC to be deposited from and withdrawn to public blockchain addresses and employs security procedures such as multiple encrypted private key shards, usernames, passwords, and 2-step verification. Private key shards are distributed geographically in secure vaults worldwide, including in the United States, to eliminate single points of failure.
- Transfer Agent: Continental Stock Transfer & Trust Company serves as the Transfer Agent and holds Shares primarily in book-entry form, crediting Creation Baskets to investors on behalf of Authorized Participants. The Transfer Agent assists with preparing shareholders’ accounts and tax statements and is indemnified by the Sponsor against liability for improper transfers. Fees paid to the Transfer Agent are considered Sponsor-paid Expenses.
Grayscale Zcash Trust (ZEC) operates in the digital asset investment product industry, competing with other grayscale trusts and exchange-traded products that provide exposure to cryptocurrencies such as Bitcoin and Ethereum. The Trust’s competitive advantages include its use of Coinbase Custody Trust Company, LLC for cold storage of private key shards, its geographic distribution of secure vaults, and its Sponsor’s experience in managing digital asset investment vehicles. The Trust differentiates itself by directly holding ZEC rather than using derivatives, minimizing counterparty and credit risk.
The Trust serves accredited investors who purchase Shares in private placements and investors who trade Shares on OTCQX after meeting the requisite holding period under Rule 144. Shares are issued only to accredited investors in exchange for ZEC deposits, and after the holding period, they may be resold on OTCQX with Sponsor approval. The Sponsor intends to engage additional unaffiliated Authorized Participants in the future to broaden access to the Trust’s Shares.