Zcash ETF fee war: Winklevoss undercuts Grayscale with ETF filing

The Winklevoss Asset Services filed a preliminary S-1 with the U.S. Securities and Exchange Commission (SEC) on Tuesday, October 6, for a spot Zcash (ZEC) exchange-traded fund (ETF).

It states that it would charge a 0.25% annual sponsor fee, which is one-tenth of what market leader Grayscale charges on the only live U.S. Zcash ETF.

A 0.25% fee against Grayscale’s 2.5%

The fund is named the Winklevoss Zcash ETF, and it would hold ZEC directly and list on Nasdaq under the ticker WINK, according to the S-1 filing.

It is coming with a 0.25% charge that is far below the 2.5% fee that Grayscale takes for ZCSH.

Grayscale’s product is the incumbent the Winklevosses are targeting. ZCSH converted from a long-running trust and began trading on NYSE Arca on August 25, the first U.S. spot fund tracking a privacy coin.

Within a month, it has seen more than $233 million in inflows and approached $890 million in net assets, enough to prompt a 3-for-1 share split.

With WINK coming into the picture, it will be undercutting ZCSH’s fee by 90%.

Who is the custodian and adviser behind WINK?

The custodian is still within the Winklevoss twins orbit, with their exchange, Gemini Trust Company, acting in that capacity. It holds the trust’s ZEC in cold storage.

Winklevoss Capital Fund has signaled nonbinding interest in buying up to $100 million of shares in the offering.

The trust has also retained Cypherpunk Technologies as its “Zcash Ecosystem Partner.” In its S-1 filing, it stated that Cypherpunk’s role covers protocol guidance and coinholder polling and voting. 

Cameron Winklevoss is listed on the filing as the contact at the sponsor’s Wilmington, Delaware offices. 

Cypherpunk, a Nasdaq-listed firm backed by Tyler Winklevoss, has been accumulating ZEC aggressively. It reportedly purchased $29 million worth of ZEC that lifted its stash to nearly 2% of circulating supply as it works toward a 5% target.

A crowded race for a resurgent coin

WINK would make the Winklevoss sponsor the third issuer chasing a U.S. spot Zcash ETF, following Grayscale and Bitwise. 

Bitwise disclosed its hand late last year, filing with the SEC for 11 “strategy” ETFs that included ZEC alongside tokens such as AAVE and Bittensor’s TAO. Outside the U.S., 21Shares listed Europe’s first Zcash ETP on Euronext Paris and Amsterdam in September, also at a 2.5% fee.

The filings track a sharp revival in ZEC itself. The token traded around $1,359 on Tuesday, up from roughly $42 to $50 a year earlier, as backers including a16z crypto and Vitalik Buterin have pushed privacy as a theme for 2026. Zcash uses zk-SNARKs, a form of cryptography that lets users hide the sender, recipient, and amount of a transaction.

The twins’ long Zcash bet

The move extends a years-long Winklevoss involvement with the asset. Gemini was the first licensed exchange to offer Zcash trading and custody, and in January, the twins donated $1.2 million worth of ZEC to Shielded Labs, an independent Zcash developer. 

The WINK filing also arrives 13 years after the pair filed for the first U.S. spot bitcoin ETF, an application the SEC rejected in 2017 over price-manipulation concerns.

So far, the S-1 is preliminary, and the trust cannot sell shares until the registration becomes effective, meaning the fee fight with Grayscale only begins if and when the SEC clears WINK to trade.

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