Grayscale, a crypto asset management giant, has submitted a proposal to the US Securities and Exchange Commission (SEC) for an innovative privacy-focused exchange-traded fund (ETF).
Meanwhile, governments worldwide are tightly scrutinizing privacy tokens.
Grayscale Tries to Advance Its Offerings With Privacy ETF
Grayscale designed the privacy ETF to echo the performance of five key privacy and security sectors. These sectors range from data protection and privacy services to cybersecurity. They also encompass innovations in blockchain, artificial intelligence, and edge computing, as outlined in the SEC filing.
Furthermore, the ETF keeps tabs on digital currencies, prioritizing user privacy through encryption. Significantly, this includes the Grayscale Zcash Trust (ZCSH).
“The Index intends to allocate 10% to the Privacy-Preserving Protocol sub-theme, which seeks to capture investment exposure to privacy and security-focused digital assets via ZCSH, a publicly quoted and SEC reporting vehicle that is solely and passively invested in Zcash,” Grayscale explained.
Zcash is distinguished by its focus on privacy and anonymity, enabling transactions without exposing crucial details such as the identities of the sender and recipient or the transaction volume. The Grayscale Zcash Trust, which passively backs Zcash, seeks to simplify investor access to Zcash. This bypasses the hurdles associated with direct cryptocurrency transactions.
This initiative has catalyzed a notable rise in Zcash (ZEC), with a 20% uptick in the past day.
Read more: Zcash (ZEC) Price Prediction 2023/2025/2030
Floodgates Open for New Crypto ETFs
To qualify for the ETF, companies must meet rigorous standards, including being publicly traded in the US with a minimum market cap of $250 million and meeting liquidity requirements. This ensures the inclusion of robust and credible firms, enhancing the ETF’s attractiveness to investors.
Grayscale’s move is noteworthy for its focus on privacy and its influence in crypto management. Boasting approximately $27 billion in assets under management, Grayscale has been pivotal in promoting Bitcoin ETFs.
Read more: Anonymity vs. Pseudonymity: Understanding the Key Differences
If the SEC approves the privacy ETF, it would be the US’s first and would expand investment opportunities in the privacy and security domain.
However, the enthusiasm for privacy coins like Zcash faces challenges such as global regulatory hurdles. Nations such as Dubai, Japan, South Korea, and Australia have banned privacy coins. They argue that the anonymity provided by these coins could facilitate illegal activities. Hence, there is an ongoing struggle to balance privacy rights with regulatory oversight in the crypto arena.
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