CoinShares Zcash ETP halted on debut, then trades in Paris

A privacy coin's latest step into mainstream markets got off to a bumpy start. The CoinShares Zcash ETP, listed on Euronext Paris under the ticker ZCSH, was suspended on Wednesday, Oct. 28, the morning it was due to begin trading.

What happened

A Euronext notice listed the suspension from 09:00 "until further notice" without giving a reason, Unchained reported. A Euronext spokesperson later told Cointelegraph and Unchained that the product would stay suspended until standard settlement could be "fully supported" by the central securities depository, and that the step was "not tied to broader concerns or regulatory trends regarding crypto-based ETPs."

CoinShares said trading resumed at noon CET, and that settlement "has absolutely nothing to do with CoinShares," according to Unchained, which said it could not find a Euronext notice confirming the restart.

The product is fully backed by ZEC held in institutional custody, trades in euros and carries a 1.50% annual management fee, CoinShares said. The firm described Zcash as a network with a market value above $20 billion that keeps Bitcoin's 21 million coin cap and adds optional shielded transactions.

Zcash went live in October 2016, built on a fork of Bitcoin's code. Transactions are public unless a user chooses to shield them with zero-knowledge proofs, and holders can share viewing keys so an auditor can inspect specific payments. CoinShares argues that this mix of optional privacy and built-in auditability is what makes the asset suitable for a regulated product. The note's ISIN is GB00BNRRG954. It joins the CoinShares Physical range and is 100% physically backed by ZEC, the firm said, rather than tracking the coin's price through derivatives or swaps.

Why it matters

The CoinShares Zcash ETP is the fourth exchange-traded product in Europe tracking ZEC, after offerings from 21Shares, Virtune and Valour. 21Shares' version charges 2.5% a year and debuted in Paris and Amsterdam on Sept. 22, according to Unchained. In the US, Grayscale's Zcash ETF has traded on NYSE Arca since Aug. 25 under the same ZCSH ticker, though it is a separate product.

The launch shows demand for privacy assets in regulated wrappers, and it follows the Zcash NU7 upgrade earlier this month. It also shows that market plumbing can trip up a listing even where the rules allow it, at a time when regulated crypto wrappers keep spreading across Europe, including Switzerland's first retail bitcoin ETF. "When investors want exposure to an asset, we build the regulated route to it," CoinShares CEO Jean-Marie Mognetti said.

What's next

For the CoinShares Zcash ETP, investors will watch spreads and volumes once settlement runs normally, and whether other exchanges list the note. Euronext has not published a separate explanation. Product details are in CoinShares' launch announcement.