Zcash ETF (ZCSH) risk factors, FY2025 10-K

Zcash ETF's FY2025 10-K, filed Mar 12, 2026, lists 74 risk factors. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

Open ZCSH in Gloom →
Zcash ETF's chart, financials and news, free in your browser.Open ZCSH in Gloom →
Risk factors listed
740 groups
Section length
32k wordsItem 1A

Zcash ETF's biggest risks in the FY2025 10-K

  • ZEC price volatility, network disruptions and forks dominate the risk disclosures.
  • The Trust depends on an immature Zcash ecosystem, third-party providers and a limited-history pricing Index.
  • Custody breaches or irreversible transaction errors could permanently reduce Trust assets.
  • Share prices can diverge from NAV, while fees steadily reduce the ZEC represented by each Share.

The risks most specific to Zcash ETF

  • Risk Factors Related to Digital Assets

    Extreme ZEC price volatility could cause Shares to lose all or substantially all of their value.

  • Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets, or any ability to participate in or otherwise influence a digital asset’s underlying network, could have an adverse effect on the market price of such digital asset

    The largest 100 unshielded ZEC wallets held approximately 46% of circulating ZEC, creating concentrated ownership and sale risk.

  • In the event of a hard fork of the Zcash Network, the Sponsor will, if permitted by the terms of the Trust Agreement, use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes, and in doing so may adversely affect the value of the Shares

    After a Zcash hard fork, the Sponsor may choose which incompatible network the Trust treats as Zcash, potentially harming Share value.

  • The Index has a limited history and a failure of the Index Price could adversely affect the value of the Shares

    The Index has limited history, uses changing Digital Asset Trading Platforms, and could produce an unreliable ZEC reference price.

  • Congestion or delay on the Zcash Network may delay purchases or sales of ZEC by the Trust

    Zcash Network congestion, system failures or poor connectivity could delay the Trust’s ZEC purchases and sales.

  • The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose challenges to the safekeeping of the Trust’s ZEC and to the operations of the Trust

    Replacing the Custodian, Authorized Participant or other providers could disrupt operations or the safekeeping of the Trust’s ZEC.

  • Security threats to the Digital Asset Account could result in the halting of Trust operations and a loss of Trust assets or damage to the reputation of the Trust, each of which could result in a reduction in the value of the Shares

    Hackers or malware could steal or damage ZEC in the Trust’s Digital Asset Account, halt operations and reduce Share value.

  • ZEC transactions are irrevocable and stolen or incorrectly transferred ZEC may be irretrievable. As a result, any incorrectly executed ZEC transactions could adversely affect the value of the Shares

    ZEC transfers are generally irreversible, so theft or an incorrect transfer may permanently deprive the Trust of assets.

  • The amount of the Trust’s assets represented by each Share will decline over time as the Trust pays the Sponsor’s Fee and Additional Trust Expenses, and as a result, the value of the Shares may decrease over time

    Sponsor fees and other expenses paid in ZEC reduce the amount of ZEC represented by each Share over time.

All 74 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Risk Factors Related to Digital Assets
  2. 02Digital assets such as ZEC were only introduced within the past two decades, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies and to the fundamental investment characteristics of digital assets
  3. 03Digital asset networks and related protocols are dependent upon the internet. A disruption of the internet or a digital asset network or related protocol, such as the Zcash Network, would affect the ability to transfer digital assets, including ZEC, and, consequently, their value
  4. 04Many digital asset networks face significant scaling challenges and are being upgraded with various features to increase the speed and throughput of digital asset transactions. These attempts to increase the volume of transactions may not be effective
  5. 05Digital assets represent a relatively new and rapidly evolving industry, and the value of the Shares depends on the acceptance of ZEC
  6. 06Changes in the governance of a digital asset network or protocol may not receive sufficient support from users and miners, which may negatively affect that digital asset network’s or protocol’s ability to grow and respond to challenges
  7. 07Digital asset networks face significant scaling challenges and efforts to increase the volume and speed of transactions may not be successful
  8. 08Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset
  9. 09Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets, or any ability to participate in or otherwise influence a digital asset’s underlying network, could have an adverse effect on the market price of such digital asset
  10. 10A temporary or permanent “fork” or a “clone” could adversely affect the value of the Shares
  11. 11In the event of a hard fork of the Zcash Network, the Sponsor will, if permitted by the terms of the Trust Agreement, use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes, and in doing so may adversely affect the value of the Shares
  12. 12Any name change and any associated rebranding initiative by the core developers of ZEC may not be favorably received by the digital asset community, which could negatively impact the value of ZEC and the value of the Shares
  13. 13In accordance with its regulatory obligations, the Authorized Participant, or the Liquidity Provider, conducts customer due diligence and enhanced due diligence on its counterparties, which enables it to determine each counterparty’s AML and other risks and assign an appropriate risk rating
  14. 14Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity
  15. 15The value of the Shares relates directly to the value of ZEC, the value of which may be highly volatile and subject to fluctuations due to a number of factors
  16. 16In addition, there is no assurance that ZEC will maintain its value in the long or intermediate term. In the event that the price of ZEC declines, the Sponsor expects the value of the Shares to decline proportionately
  17. 17Digital Asset Trading Platforms may be exposed to front-running
  18. 18Digital Asset Trading Platforms may be exposed to wash-trading
  19. 19The Index has a limited history and a failure of the Index Price could adversely affect the value of the Shares
  20. 20The Index Price used to calculate the value of the Trust’s ZEC may be volatile, and purchasing activity in the Digital Asset Markets associated with Basket creations may affect the Index Price and Share trading prices, adversely affecting the value of the Shares
  21. 21Competition from the emergence or growth of other digital assets could have a negative impact on the price of ZEC and adversely affect the value of the Shares
  22. 22Principal Market NAV per Share
  23. 23Congestion or delay on the Zcash Network may delay purchases or sales of ZEC by the Trust
  24. 24The SEC has approved generic listing standards for commodity-based trust shares and may approve other applications under Rule 19b-4 of the Exchange Act to list competing digital assets as exchange-traded products, which could reduce demand for, and the price of, ZEC and adversely impact the value of the Shares
  25. 25Competition from central bank digital currencies (“CBDCs”) and emerging payments initiatives involving financial institutions could adversely affect the price of ZEC and other digital assets
  26. 26Prices of ZEC may be affected due to stablecoins (including Tether and USDC), the activities of stablecoin issuers and their regulatory treatment
  27. 27The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose challenges to the safekeeping of the Trust’s ZEC and to the operations of the Trust
  28. 28The Trust is an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make the Shares less attractive to investors
  29. 29The Shares may trade at a price that is at, above or below the Trust’s NAV per Share as a result of the non-concurrent trading hours between OTCQX and the Digital Asset Trading Platform Market
  30. 30Shareholders may suffer a loss on their investment if the Shares trade above or below the Trust’s NAV per Share
  31. 31The amount of the Trust’s assets represented by each Share will decline over time as the Trust pays the Sponsor’s Fee and Additional Trust Expenses, and as a result, the value of the Shares may decrease over time
  32. 32The value of the Shares may be influenced by a variety of factors unrelated to the value of ZEC
  33. 33Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act or the protections afforded by the CEA
  34. 34The Trust is not a registered investment company under the Investment Company Act, and the Sponsor believes that the Trust is not required to register under such act. Consequently, shareholders do not have the regulatory protections provided to investors in investment companies
  35. 35The restrictions on transfer and redemption may result in losses on the value of the Shares
  36. 36Affiliates of the Trust previously entered into a settlement agreement with the SEC concerning the operation of one such affiliate’s former redemption programs
  37. 37There is no guarantee that an active trading market for the Shares will continue to develop
  38. 38As the Sponsor and its management have limited history of operating investment vehicles like the Trust, their experience may be inadequate or unsuitable to manage the Trust
  39. 39Security threats to the Digital Asset Account could result in the halting of Trust operations and a loss of Trust assets or damage to the reputation of the Trust, each of which could result in a reduction in the value of the Shares
  40. 40ZEC transactions are irrevocable and stolen or incorrectly transferred ZEC may be irretrievable. As a result, any incorrectly executed ZEC transactions could adversely affect the value of the Shares
  41. 41The lack of full insurance and shareholders’ limited rights of legal recourse against the Trust, Trustee, Sponsor, Transfer Agent and Custodian expose the Trust and its shareholders to the risk of loss of the Trust’s ZEC for which no person or entity is liable
  42. 42The Trust may be required, or the Sponsor may deem it appropriate, to terminate and liquidate at a time that is disadvantageous to shareholders
  43. 43The Trust Agreement includes provisions that limit shareholders’ voting rights and restrict shareholders’ right to bring a derivative action
  44. 44The Sponsor is solely responsible for determining the value of the NAV and NAV per Share and any errors, discontinuance or changes in such valuation calculations may have an adverse effect on the value of the Shares
  45. 45Extraordinary expenses resulting from unanticipated events may become payable by the Trust, adversely affecting the value of the Shares
  46. 46The Trust’s delivery or sale of ZEC to pay expenses or other operations of the Trust could result in shareholders’ incurring tax liability without an associated distribution from the Trust
  47. 47The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, the Transfer Agent or the Custodian under the Trust Documents
  48. 48Intellectual property rights claims may adversely affect the Trust and the value of the Shares
  49. 49Pandemics, epidemics and other natural and man-made disasters could negatively impact the value of the Trust’s holdings and/or significantly disrupt its affairs
  50. 50Shareholders may not receive the benefits of any forks or airdrops
  51. 51The Sponsor may implement restatements, amendments or supplements to the Trust Agreement that may not necessarily align with shareholder interests
  52. 52The Sponsor may implement restatements, amendments or supplements to the Trust Agreement that may increase risk to the Trust’s intended tax treatment
  53. 53A determination that ZEC or any other digital asset is a “security” may adversely affect the value of ZEC and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust
  54. 54Regulatory changes or actions by the U.S. Congress or any U.S. federal or state agencies may affect the value of the Shares or restrict the use of ZEC, mining activity or the operation of the Zcash Network or the Digital Asset Markets in a manner that adversely affects the value of the Shares
  55. 55Competing industries may have more influence with policymakers than the digital asset industry, which could lead to the adoption of laws and regulations that are harmful to the digital asset industry
  56. 56Regulatory changes or other events in foreign jurisdictions may affect the value of the Shares or restrict the use of one or more digital assets, mining activity or the operation of their networks or the Digital Asset Trading Platform Market in a manner that adversely affects the value of the Shares
  57. 57If regulators or public utilities take actions that restrict or otherwise impact mining activities, there may be a significant decline in such activities, which could adversely affect the Zcash Network and the value of the Shares
  58. 58If regulators subject an Authorized Participant, the Trust or the Sponsor to regulation as a money service business or money transmitter, this could result in extraordinary expenses to the Authorized Participant, the Trust or the Sponsor and also result in decreased liquidity for the Shares
  59. 59Statutory or regulatory changes or interpretations could obligate the Trust or the Sponsor to register and comply with new regulations, resulting in potentially extraordinary, nonrecurring expenses to the Trust
  60. 60The treatment of the Trust for U.S. federal income tax purposes is uncertain
  61. 61U.S. federal income tax purposes, certain future developments could render it impossible, or impracticable, for the Trust to continue to be treated as a grantor trust for such purposes
  62. 62The treatment of digital assets for U.S. federal income tax purposes is uncertain
  63. 63Future developments regarding the treatment of digital assets for U.S. federal income tax purposes could adversely affect the value of the Shares
  64. 64Future developments in the treatment of digital assets for tax purposes other than U.S. federal income tax purposes could adversely affect the value of the Shares
  65. 65The tax treatment of ZEC and transactions involving ZEC for state and local tax purposes is not settled
  66. 66A U.S. tax-exempt shareholder may recognize “unrelated business taxable income” as a consequence of an investment in Shares
  67. 67Non-U.S. Holders may be subject to U.S. federal withholding tax on income derived from forks, airdrops and similar occurrences
  68. 68Risk Factors Related to Potential Conflicts of Interest
  69. 69The Sponsor’s indirect parent company, DCG, and certain of its subsidiaries, including Grayscale Securities, LLC, hold
  70. 70Because the Sponsor and the Trust’s sole Authorized Participant are affiliated with each other, the Trust’s Baskets will not be exchanged for ZEC in arm’s-length transactions
  71. 71DCG is a minority interest holder in Kraken, which operates one of the Digital Asset Trading Platforms included in the Index Price
  72. 72Shareholders cannot be assured that the Sponsor will be willing or able to continue to serve as sponsor to the Trust for any length of time. If the Sponsor discontinues its activities on behalf of the Trust and a substitute sponsor is not appointed, the Trust will terminate and liquidate its ZEC
  73. 73Although the Custodian is a fiduciary with respect to the Trust’s assets, if the Custodian resigns or is removed by the Sponsor or otherwise, without replacement, it would trigger early termination of the Trust
  74. 74Shareholders may be adversely affected by the lack of independent advisers representing investors in the Trust

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.