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ZEC $1,358 Winklevoss files for spot Zcash ETF trading as WINK
Winklevoss Asset Services filed an S-1 on Oct. 6 for a fund holding ZEC directly, with Gemini as custodian.
Key takeaways
- The fee is 0.25%. Sponsor fees would run at 0.25% a year, accrued daily and settled in ZEC.
- Grayscale traded first. Grayscale's ZCSH listed on Aug. 25 and by Sept. 8 held more than $500 million.
- ZEC is near $1,376. Zcash gained more than 5% in 24 hours and changed hands above $1,376, per CoinGape.
What happened
Winklevoss Asset Services filed an S-1 registration statement with the U.S. SEC on Oct. 6 for a spot Zcash exchange-traded fund. The proposed fund would hold ZEC directly and trade on Nasdaq under WINK. Gemini Trust Company, which the filing calls an affiliate of the sponsor, would keep the fund's coins in segregated cold storage.
The trust would pay the sponsor an annual fee of 0.25%, accrued daily in ZEC. The filing names Cypherpunk Technologies, a Nasdaq-listed company with ZEC in its treasury, as the trust's Zcash Ecosystem Partner. Cypherpunk may help with coinholder polling and voting and advise on technical changes to the network. Winklevoss Capital Fund has signaled interest, through affiliates, in buying as much as $100 million of WINK shares, and the filing says such indications are not binding commitments to purchase.
Shares would be created and redeemed in cash by authorized participants, CoinGape reported, and Winklevoss Asset Services would then buy ZEC to create additional shares.
Why it matters
WINK would become the second U.S. fund to offer spot ZEC exposure. On Aug. 25, Grayscale listed a Zcash ETF under the ticker ZCSH on NYSE Arca, after filing to convert its Zcash Trust. By Sept. 8, Grayscale said that fund held more than $500 million, about $100 million of which came from a subsidiary of its parent company, Digital Currency Group.
The S-1 lists the Orchard bug among its risk factors. A Shielded Labs researcher identified the flaw in late May, and the bug could have allowed counterfeit ZEC to be minted inside that shielded pool. An emergency upgrade closed the flaw in early June, and Zcash developers have said there is no evidence it was exploited. The filing warns that no cryptographic method can determine conclusively whether the vulnerability was exploited before remediation.
Zcash rose over 5% in the past 24 hours and traded at slightly more than $1,376, CoinGape reported, while the wider crypto market gained nearly 1%. Traders are also watching the NU7 mainnet activation decision scheduled for Oct. 20.
Background
In March 2017, the SEC disapproved a Bats BZX Exchange proposal to list the Winklevoss Bitcoin Trust. Winklevoss Capital led a $58.88 million private placement last October in Leap Therapeutics, the biotech company that later renamed itself Cypherpunk.
What is still unclear
- The preliminary prospectus still leaves the pricing benchmark, the administrator and the seed investor blank.
- The ETF still requires regulatory clearance before it can begin trading on Nasdaq.
- The S-1 says cryptographic methods cannot show conclusively whether the vulnerability was exploited before it was remediated.
Questions readers ask
What is the Winklevoss Zcash ETF?
It is a proposed spot fund that would hold ZEC directly and list on Nasdaq under the ticker WINK. Winklevoss Asset Services filed an S-1 for it with the SEC on Oct. 6, and Gemini Trust Company would be the custodian.
Is there already a spot Zcash ETF in the United States?
Yes. Grayscale listed its Zcash ETF, ticker ZCSH, on NYSE Arca on Aug. 25, and by Sept. 8 the fund held more than $500 million.
What fee would the Winklevoss Zcash ETF charge?
The S-1 shows a sponsor fee of 0.25% a year, accrued daily in ZEC.
When is the Zcash NU7 mainnet decision?
CoinGape reported that a decision on activating NU7 on mainnet is scheduled for Oct. 20.
