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Grayscale Files for ZCash ETF: Privacy Coin Gets Regulated Treatment in the U.S.

Grayscale Investments has officially filed with the SEC to transform its ZCash Trust into a publicly traded spot ETF (ZCSH). This move marks a first for privacy coins in the U.S. and could open the door to regulated exposure for institutional and retail investors alike. With $199 million in assets under management, ZCSH aims to offer a way to invest in $ZEC while complying with U.S. financial regulations.

ZCash, which uses zk-SNARKs for fully shielded transactions, offers privacy but faces challenges with KYC and AML compliance. Notably, less than 5% of ZEC transactions use its fully shielded features, making it more palatable to regulators while sacrificing some of its privacy appeal.

The SEC’s decision on whether to approve ZCSH could set a critical precedent for the future of privacy coins in regulated markets. If approved, ZCash would be recognized as a viable investment within the financial system. A rejection could signal that privacy coins face an uncertain future in traditional finance.

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