Winklevoss Asset Services, the fund sponsor run by chief executive Cameron Winklevoss, filed a registration statement with the SEC on Tuesday for a spot Zcash exchange-traded fund. The Winklevoss Zcash ETF would hold ZEC directly and list on Nasdaq under the ticker WINK.
The trust would pay the sponsor an annual fee of 0.25%, accrued daily in ZEC, the S-1 shows. Gemini Trust Company, which the filing describes as an affiliate of the sponsor, would keep the fund’s coins in segregated cold storage addresses.
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Cypherpunk’s Role
The filing also names Cypherpunk Technologies, a Nasdaq-listed company that holds ZEC in its treasury, as the trust’s “Zcash Ecosystem Partner.” Under that agreement, Cypherpunk may help with coinholder polling and voting and advise on technical changes to the network. Winklevoss Capital, the investment firm Cameron and Tyler Winklevoss started in 2012, led a $58.88 million private placement last October in Leap Therapeutics, the biotech company that later renamed itself Cypherpunk.
Winklevoss Capital Fund has signaled interest, through affiliates, in buying as much as $100 million of WINK shares, the S-1 says. The filing adds that “indications of interest are not binding agreements or commitments to purchase.”
The preliminary prospectus still leaves several details blank, including the pricing benchmark, the administrator and the seed investor.
A Second Zcash ETF
WINK would be the second U.S. fund offering spot ZEC exposure. Grayscale, which had filed to convert its Zcash Trust into an ETF, began trading the Zcash ETF (ZCSH) on NYSE Arca on Aug. 25. By Sept. 8, Grayscale said the fund held more than $500 million, about $100 million of which came from a subsidiary of its parent company, Digital Currency Group.
Among its risk factors, the Winklevoss filing details the Orchard bug that a Shielded Labs researcher identified in late May, a flaw that could have allowed counterfeit ZEC to be minted inside that shielded pool. An emergency upgrade patched it in early June. Zcash developers have said there is no evidence the bug was exploited. Still, the S-1 warns in its risk disclosures that “there is no cryptographic method to determine conclusively whether the vulnerability was exploited prior to remediation.”
The Winklevoss name has been on a crypto ETF filing before. In March 2017, the SEC disapproved a Bats BZX Exchange proposal to list the Winklevoss Bitcoin Trust.
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