Grayscale Seeks SEC Approval for New Data Privacy ETF
Grayscale Investments has filed a regulatory document with the U.S. Securities and Exchange Commission (SEC) to launch a new exchange-traded fund (ETF) focused on data privacy companies and protocols like Zcash (ZEC). The Grayscale Privacy ETF (PRVC) will invest at least 80% of its net assets in data privacy solution providers and blockchain-based privacy solutions. However, it will not directly invest in cryptocurrencies.
Tracking the Indxx Data Privacy Index
The PRVC ETF will track the performance of the Indxx Data Privacy Index, which encompasses five sub-themes, including cybersecurity and privacy-preserving protocols. Additionally, the ETF plans to allocate approximately 10% to privacy-focused protocols through Grayscale’s Trust for Zcash (ZCSH).
Selecting Companies Based on Revenue and Compliance
Grayscale uses a scoring system to select companies for the ETF based on their revenue derived from the data privacy segment. Higher scores are given to companies with at least 50% of revenue attributed to relevant sub-themes and adherence to data privacy regulations like GDPR and CCPA.
Challenges Faced by Privacy-Centric Cryptocurrencies
Despite this filing, privacy-centric cryptocurrencies such as ZEC face pushback from centralized exchanges due to concerns about potential illicit activities. Binance, for example, extended its “Monitoring Tag” coverage to include tokens like Monero (XMR) and Zcash, subjecting them to rigorous scrutiny and potential delisting if they fail to meet compliance standards.
Hot Take: Grayscale Expands Crypto Investment Opportunities
With its plan to launch the Grayscale Privacy ETF focused on data privacy companies and protocols, Grayscale Investments is expanding investment opportunities in the crypto space. By providing exposure to the growing demand for data privacy solutions, this ETF allows you to diversify your portfolio and potentially benefit from the growth of privacy-focused technologies. However, it’s important to stay informed about the challenges faced by privacy-centric cryptocurrencies and the regulatory landscape surrounding them. As always, conduct thorough research and consider your risk tolerance before making any investment decisions.
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