Grayscale wants to launch new ETF tracking privacy coins like Zcash

Grayscale seeks SEC approval for a new exchange-traded fund (ETF), which will track the performance of data privacy companies and protocols like Zcash.

In a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Grayscale Investments said it plans to roll out a new ETF, that will invest at least 80% of its net assets in data privacy solution providers, blockchain-based privacy solutions and protocols like Zcash (ZEC).

The so-called Grayscale Privacy ETF (PRVC) will not invest directly in crypto but will track the Indxx Data Privacy Index, which focuses on five sub-themes like cybersecurity and privacy-preserving protocols. The ETF also plans to allocate around 10% to the privacy-focused protocols via ZCSH, Grayscale’s Trust for Zcash.

Grayscale says the ETF uses a scoring system to select companies based on their revenue derived from the data privacy segment. Companies with at least 50% of revenue attributed to relevant sub-themes and adhering to data privacy regulations like GDPR and CCPA would get higher scores, the document reads.

Despite the filing, ZEC and other privacy-centric cryptocurrencies are currently facing pushback from centralized exchanges, as concerns about their potential use in illicit activities continue to surface. In January, Binance announced its plan to extend “Monitoring Tag” coverage to include 10 additional tokens, including Monero (XMR) and Zcash.

Binance clarified that tokens with its “Monitoring tag” undergo rigorous scrutiny due to their heightened volatility, subject to regular reviews ensuring compliance with listing criteria. The platform cautioned users that failure to meet these standards could result in the delisting of tokens.