Grayscale Chief Legal Officer Craig Salm took the stage at Consensus Hong Kong on Feb. 14 to publicly back privacy coin Zcash (ZEC). He argued that Zcash is not a money laundering tool but rather a "necessary infrastructure for normal business operations."
Salm illustrated with a simple business scenario: when a company makes a large payment to a supplier, it doesn't want competitors to see that transaction — which could reveal purchasing strategies and capital deployment. He pointed out that Bitcoin's transparent blockchain allows anyone to track transfers, something unthinkable in traditional finance. Privacy, he said, is a business necessity, not a way to evade regulation.
Zcash's Selective Disclosure: Transparent to Tax Authorities, Private to Competitors
Salm highlighted Zcash's unique "selective disclosure" mechanism. Using the built-in "viewing key" technology, users can authorize tax or audit agencies to verify transaction records and tax payments, while keeping all other details hidden from the public. For regulators, it is fully auditable; for outsiders, shielded transactions using zk-SNARKs zero-knowledge proofs remain invisible on-chain. Salm stressed that this design — transparent to authorities, private to competitors — is the core argument for why Grayscale believes Zcash can pass SEC review.
Zcash Trust-to-ETF Conversion Underway
Salm confirmed that Grayscale owns a "substantial Zcash Trust" and is actively working to convert it into an ETF. Specifically, on Nov. 26, 2025, Grayscale filed an S-3 registration statement with the SEC to convert its Grayscale Zcash Trust (ZCSH) into a spot ETF listed on NYSE Arca. Key details: the trust holds about $137 million in assets, representing roughly 5% of Zcash's circulating supply; management fee is 2.50%, paid in ZEC and accrued daily; custodian is Coinbase Custody Trust Company, with BNY Mellon handling administration. Industry observers expect the SEC to make a decision in Q2 2026.
Grayscale has successfully converted its Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) into spot ETFs, but a privacy coin ETF faces greater regulatory hurdles. By championing Zcash at a top industry summit, Grayscale aims to win regulatory approval.
CLARITY Act and the Battle with Full-Privacy Coins
The U.S. House passed the CLARITY Act in July 2025, and the Senate Banking Committee took it up in January 2026 but delayed due to bipartisan negotiations. The bill is a double-edged sword for privacy coins: it provides a compliance framework for privacy coins with selective disclosure (like Zcash) while requiring exchanges to implement comprehensive transaction monitoring — a devastating blow to fully anonymous coins like Monero (XMR). Zcash's "optional privacy" design positions it favorably in this regulatory landscape.
ZEC Surpasses Monero in Market Cap
At press time, Zcash trades at approximately $233, with a total market cap of about $3.8 billion, ranking 25th among cryptocurrencies. ZEC recently overtook Monero to become the highest-valued privacy coin by market capitalization.