Winklevoss Asset Services filed an S-1 registration statement with the U.S. Securities and Exchange Commission on Tuesday for a spot Zcash exchange-traded fund. The proposed fund would hold ZEC directly and list on Nasdaq under the ticker WINK.
The filing says the trust would pay the sponsor a 0.25% annual fee, accrued daily in ZEC. Gemini Trust Company, described in the registration statement as an affiliate of the sponsor, would custody the fund’s coins in segregated cold-storage addresses.
Cypherpunk Technologies named as ecosystem partner
The filing also identifies Cypherpunk Technologies as the trust’s Zcash Ecosystem Partner. It describes the company as Nasdaq-listed and as holding ZEC in its treasury. Under that arrangement, Cypherpunk may assist with coinholder polling and voting and may advise on technical changes to the network.
The registration statement adds that Winklevoss Capital, the investment firm Cameron and Tyler Winklevoss launched in 2012, led a $58.88 million private placement last October in Leap Therapeutics, the biotech company that later changed its name to Cypherpunk.
According to the S-1, Winklevoss Capital Fund has also signaled interest, through affiliates, in buying as much as $100 million of WINK shares. The document says those indications of interest are not binding agreements or commitments to purchase.
A second U.S. spot ZEC fund if approved
If the ETF wins approval, WINK would become the second U.S. fund offering spot exposure to ZEC.
Grayscale had previously filed to convert its Zcash Trust into an ETF. Its Zcash ETF, trading under the ticker ZCSH, began trading on NYSE Arca on Aug. 25. By Sept. 8, Grayscale said the fund held more than $500 million, with about $100 million of that coming from a subsidiary of its parent company, Digital Currency Group.
The preliminary prospectus for WINK still leaves several items blank, including the pricing benchmark, the administrator, and the seed investor.
Filing highlights the Orchard bug as a risk factor
Among the risk disclosures, the Winklevoss filing discusses the Orchard bug. A Shielded Labs researcher identified the flaw in late May, and the issue could have allowed counterfeit ZEC to be minted inside that shielded pool. An emergency upgrade patched the bug in early June.
Zcash developers have said there is no evidence the vulnerability was exploited. Even so, the S-1 says there is no cryptographic method to determine conclusively whether the flaw had been exploited before the remediation was put in place.
Winklevoss name has appeared on prior crypto ETF filings
The Winklevoss name has shown up in crypto ETF filings before. In March 2017, the SEC disapproved a Bats BZX Exchange proposal to list the Winklevoss Bitcoin Trust.