What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-07 compared with 2024-02-23 · 249 added, 208 removed, 771 unchanged (37% of the section changed)

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The Trust holds ZEC and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of ZEC.

As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on ZEC per Share) to reflect the value of ZEC held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities.

As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on ZEC per Share) to reflect the value of the ZEC held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities.

While an investment in the Shares is not a direct investment in ZEC, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ZEC.

To date, the Trust has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of ZEC held by the Trust, less the Trust’s expenses and other liabilities, but instead have traded at both premiums and discounts to such value, which at times have been substantial.

To date, the Trust has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of the ZEC held by the Trust, less the Trust’s expenses and other liabilities, but instead have traded at both premiums and discounts to such value, which at times have been substantial.

The Trust is not managed like a business corporation or an active investment vehicle.

The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

As of December 31,

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To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S.

GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, which outlines the application of fair value accounting.

GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurement , which outlines the application of fair value accounting.

ASC 820-10 determines fair value to be the price that would be received for ZEC in a current sale, which assumes an orderly transaction between market participants on the measurement date.

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Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets.

The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market,

Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Annual Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Annual Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

• First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with AML and KYC regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

• First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

• Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of ZEC traded on each Digital Asset Market in the trailing twelve months.

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The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust’s determination of its principal market.

The cost basis of the ZEC received in connection with a creation order is recorded by the Trust at the fair value of ZEC at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis of the ZEC received by the Trust in connection with a creation order is recorded by the Trust at the fair value of ZEC at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Company Considerations

The Trust is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services —Investment Companies .

The Trust is an investment company for U.S.

GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services —Investment Companies .

The Trust uses fair value as its method of accounting for ZEC in accordance with its classification as an investment company for accounting purposes.

The Trust is not a registered investment company under the Investment Company Act of 1940.

The Trust is not a registered investment company under the Investment Company Act.

GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes.

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For the Years Ended December 31,

Net realized and unrealized (loss) gain on investment

Net (decrease) increase in net assets resulting from operations

Net realized and unrealized gain (loss) on investment

Net increase (decrease) in net assets resulting from operations

Net assets (1)

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GAAP based on the Digital Asset Market price of ZEC on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Net realized and unrealized gain on investment in ZEC for the year ended December 31, 2024 was $11,248, which includes a realized loss of ($906) on the transfer of ZEC to pay the Sponsor’s Fee, and $12,154 net change in unrealized depreciation on investment in ZEC.

Net realized and unrealized gain on investment in ZEC for the year was driven by ZEC price appreciation from $27.69 per ZEC as of December 31, 2023, to $56.12 per ZEC as of December 31, 2024.

Net increase in net assets resulting from operations was $10,952 for the year ended December 31, 2024, which consisted of the net realized and unrealized gain on investment in ZEC, less the Sponsor’s Fee of $296.

Net assets increased to $22,040 at December 31, 2024, a 146% increase for the year.

The increase in net assets resulted from the aforementioned ZEC price appreciation and the contribution of approximately 78,192 ZEC with a value of $2,127 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 9,083 ZEC to pay the foregoing Sponsor’s Fee.

Net realized and unrealized loss on investment in ZEC for the year ended December 31, 2023 was ($3,312), which includes a realized loss of ($934) on the transfer of ZEC to pay the Sponsor’s Fee, and ($2,378) net change in unrealized depreciation on investment in ZEC.

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The decrease in net assets resulted from the aforementioned ZEC price depreciation and the withdrawal of approximately 8,400 ZEC to pay the foregoing Sponsor’s Fee.

Net realized and unrealized gain on investment in ZEC for the year ended December 31, 2021 was $21,976, which includes a realized gain of $32 on the transfer of ZEC to pay the Sponsor’s Fee, and $21,944 net change in unrealized appreciation on investment in ZEC.

Net realized and unrealized gain on investment in ZEC for the year was driven by ZEC price appreciation from $62.99 per ZEC as of December 31, 2020, to $143.21 per ZEC as of December 31, 2021.

Net increase in net assets resulting from operations was $20,744 for the year ended December 31, 2021, which consisted of the net realized and unrealized gain on investment in ZEC, less the Sponsor’s Fee of $1,232.

Net assets increased to $48,721 at December 31, 2021, a 259% increase for the year.

The increase in net assets was due to the aforementioned ZEC price appreciation and the contribution of approximately 132,688 ZEC, with a value of $14,396 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 8,087 ZEC to pay the foregoing Sponsor’s Fee.

Cash Resources and Liquidity

The Trust has not had a cash balance at any time since inception.

When selling ZEC, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact number of ZEC, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust’s holdings of assets other than ZEC.

When selling ZEC, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of ZEC, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust’s holdings of assets other than ZEC.

As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period.

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Closing balance

As of December 31,

Price of ZEC on principal market (1)

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Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price” for a description of the Index and the Index Price.

The Digital Asset Trading Platforms included in the Index as of December 31, 2024 were Coinbase, Kraken, Bitfinex and Gemini.

The Digital Asset Trading Platforms included in the Index as of December 31, 2023 were Coinbase, Kraken and Gemini.

The Digital Asset Trading Platforms included in the Index as of December 31, 2022 and 2021, were Coinbase, Kraken, and Binance.US.

For accounting purposes, the Trust reflects creations and the ZEC receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite number of ZEC is received.

The Digital Asset Trading Platforms included in the Index as of December 31, 2022 were Coinbase, Kraken, and Binance.US.

At this time, the Trust is not accepting redemption requests from shareholders.

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During such period, the Index Price has ranged from $18.14 to $365.90, with the straight average being $72.09 through December 31, 2024.

The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group.

The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms individually or as a group.

Twelve months ended December 31, 2020

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As of December 31, 2024, the last business day of the period, the Trust’s Shares were quoted on OTCQX at a premium of 22% to the Trust’s NAV per Share.

The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust’s Principal Market NAV per Share calculated in accordance with GAAP and the Trust’s NAV per Share for each of the quarters since October 18, 2021.

The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust’s Principal Market NAV per Share calculated in accordance with U.S.

GAAP and the Trust’s NAV per Share for each of the quarters of the prior three years.

Principal Market NAV per

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NAV per Share (2)

First quarter

Second quarter

Third quarter

Fourth quarter

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ZCSH Share Price vs.

NAV per Share ($)

The following chart sets out the historical premium and discount for the Shares as reported by OTCQX and the Trust’s NAV per Share from October 18, 2021 to December 31, 2023.

NAV per Share (Non-GAAP) ($)

The following chart sets out the historical premium and discount for the Shares calculated as a percentage of the historical closing prices for the Shares as reported by OTCQX and the Trust’s NAV per Share from October 18, 2021 to December 31, 2024.

ZCSH Premium/(Discount):

ZCSH Share Price vs.

NAV per Share (%)

NAV per Share (Non-GAAP) (%)

Recent Developments

On January 1, 2025, Grayscale Investments, LLC (“GSI”) consummated an internal corporate reorganization (the “Reorganization”), pursuant to which Grayscale Investments, LLC, the Sponsor of the Trust prior to the Reorganization, merged with and into Grayscale Operating, LLC (“GSO”), a Delaware limited liability company and a wholly owned indirect subsidiary of DCG, with GSO continuing as the surviving company (the “Merger”).

As a result of the Merger, GSO succeeded by operation of law to all the rights, powers, privileges and franchises and became subject to all of the obligations, liabilities, restrictions and disabilities of GSI, including with respect to the Sponsor Contracts (as defined below), all as provided under the Delaware Limited Liability Company Act.

The Reorganization is not expected to have any material impact on the operations of the Trust.

In connection with the Reorganization, on January 1, 2025, and promptly following the effectiveness of the Merger, GSO assigned certain contracts pertaining to its role as Sponsor (as such term is defined in the Trust Agreement) of the Trust (such contracts, the “Sponsor Contracts”) to Grayscale Investments Sponsors, LLC, a Delaware limited liability company and a wholly owned direct subsidiary of GSO (“GSIS”), whereby GSIS assumed all of the rights and obligations of GSO under the Sponsor Contracts.

Other than the assumption of the Sponsor Contracts by GSIS, the Reorganization does not alter the rights or obligations under any of the Sponsor Contracts.

In connection with the Reorganization, on January 1, 2025, and promptly following the effectiveness of the Merger, GSO and GSIS executed a Certificate of Admission, pursuant to which GSIS was admitted as an additional Sponsor of the Trust under the Trust Agreement, by and among GSO (as successor in interest to GSI), the Trustee, and the shareholders from time to time thereunder, as amended from time to time.

GSIS shall be subject to the rights and obligations of a Sponsor under the Trust Agreement.

On January 3, 2025, GSO voluntarily withdrew as a Sponsor of the Trust pursuant to the terms of the Trust Agreement, and, effective May 3, 2025, GSIS shall be the sole remaining Sponsor of the Trust.

Quantitative and Qualitat ive Disclosures about Market Risk

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Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the board of directors of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).

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Other Information

Not applicable.

No t applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Under the Trust Agreement, all management functions of the Trust have been delegated to and are conducted by the Sponsor, its agents and its affiliates, including without limitation, the Custodian and its agents.

As officers of the Sponsor, Michael Sonnenshein, the principal executive officer of the Sponsor, and Edward McGee, the principal financial officer of the Sponsor, may take certain actions and execute certain agreements and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

The Sponsor has a board of directors (the “Board”) that is responsible for managing and directing the affairs of the Sponsor.

As officers of the Sponsor, Peter Mintzberg, the principal executive officer of the Sponsor, and Edward McGee, the principal financial and accounting officer of the Sponsor, may take certain actions and execute certain agreements and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

As of and prior to December 31, 2024, GSI had a board of directors that was responsible for managing and directing the affairs of the Sponsor.

From and after January 1, 2025, GSO Intermediate Holdings Corporation (“GSOIH”), a Delaware corporation formed in connection with the Reorganization, which is the sole managing member of GSO and an indirect subsidiary of DCG, has a board of directors (each such board of directors, the “Board”).

The Board consists of Mark Shifke, Matthew Kummell, Mr.

Sonnenshein, and Mr.

McGee, who also retain the authority granted to them as officers under the limited liability company agreement of the Sponsor.

Mintzberg, and Mr.

Mintzberg and Mr.

McGee also retain the authority granted to them as officers under the limited liability company agreement of the Sponsor.

The Sponsor has an Audit Committee.

The Audit Committee has the responsibility for overseeing the financial reporting process of the Trust, including the risks and controls of that process and such other oversight functions as are typically performed by an audit committee of a public company.

The Audit Committee consists of Messrs.

Sonnenshein and McGee, and Hugh Ross, Chief Operating Officer of the Sponsor.

The Audit Committee consists of Mr.

McGee and Hugh Ross, Chief Operating Officer of the Sponsor.

The Sponsor has a code of ethics (the “Code of Ethics”) that applies to its executive officers and agents.

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The Sponsor’s Code of Ethics is intended to be a codification of the business and ethical principles that guide the Sponsor, and to deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of interest, and to foster compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations and accountability for adherence to this code.

During the year ended December 31, 2024, references to the “Sponsor” in this section refer to GSI, and thereafter refer to GSO or GSIS, as applicable.

In connection with the Reorganization, the former Board of GSI was reconstituted at GSOIH.

The members of the Board of GSOIH are the same as the members of the Board of GSI prior to the Reorganization.

Additionally, the former Audit Committee of GSI was reconstituted at GSIS.

The members of the Audit Committee of GSIS are the same as the members of the Audit Committee of GSI prior to the Reorganization.

From and after January 1, 2025, any references to the Board in this section refer to the Board of GSOIH and any references to the Audit Committee in this section refer to the Audit Committee of GSIS.

Mark Shifke, Chairman of the Board

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Matthew Kummell, Board Member

Matt Kummell, 48, is Senior Vice President of Operations at DCG and has served as a director of the Sponsor since January 2024.

Matt Kummell, 49, is Senior Vice President of Strategy & Operations at DCG and has served as a director of the Sponsor since January 2024.

In his role at DCG, Mr.

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He is a graduate of the University of California, Los Angeles (B.A.) and the Tuck School of Business at Dartmouth College (MBA).

Michael Sonnenshein, Board Member and Chief Executive Officer

Michael Sonnenshein, 37, has been CEO of the Sponsor since January 2021 and has served as a director of the Sponsor since February 2020.

Before serving as CEO, Mr.

Sonnenshein served as Managing Director of the Sponsor since 2018.

In this role, Mr.

Sonnenshein oversees the strategic direction and growth of the business.

Sonnenshein is also responsible for maintaining many of the firm’s key relationships with clients, industry stakeholders, and regulators.

From 2015 to 2017, Mr.

Sonnenshein was Director of Sales & Business Development for the Sponsor, and prior to that served as an Account Executive from 2014 to 2015.

Under his leadership, the firm has expanded its capabilities as a full services asset manager, establishing Grayscale Securities, LLC and Grayscale Advisors, LLC, and has grown to be a leader in crypto investing, offering a wide range of investments, including single-asset and diversified products and ETFs.

Prior to joining the Sponsor, Mr.

Sonnenshein was a financial adviser at JP Morgan Securities, covering HNW individuals and institutions, and an analyst at Barclays Wealth, providing coverage to middle-market hedge funds and institutions.

Sonnenshein earned his Bachelor of Business Administration from the Goizueta Business School at Emory University and his Master of Business Administration from the Leonard N.

Stern School of Business at New York University.

Sonnenshein was honored in 2021 as one of 100 People Transforming Business by Business Insider and in 2018 as the publication’s Rising Stars of Wall Street.

Peter Mintzberg, Board Member and Chief Executive Officer

Peter Mintzberg, 56, has been the Chief Executive Officer of the Sponsor and has served as a director of the Sponsor since August 2024.

Mintzberg joins the Sponsor from Goldman Sachs, where he served as Global Head of Strategy for Asset and Wealth Management.

Prior, he held several global leadership roles in Strategy, M&A, and Investor Relations at BlackRock, Apollo, OppenheimerFunds, and Invesco.

With deep knowledge across a broad base of client types and asset classes, Mintzberg has over two decades of experience developing and executing strategy and innovating to drive growth.

Mintzberg started his career working at McKinsey & Co.

in New York, San Francisco, and São Paulo, focused on the financial services and technology sectors.

Mintzberg was recognized as a Latino leader in Finance by The Alumni Society in 2018, and was selected as a David Rockefeller Fellow in the 2016-2017 Class by the Partnership for New York City.

He earned a bachelor’s degree in engineering from the Universidade Federal Rio de Janeiro, and an MBA from Harvard University.

Edward McGee, Board Member and Chief Financial Officer

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and (iii) all directors and executive officers of the Sponsor as a group.

The number of Shares beneficially owned and percentages of beneficial ownership set forth below are based on the number of Shares outstanding as of February 19, 2024.

The number of Shares beneficially owned and percentages of beneficial ownership set forth below are based on the number of Shares outstanding as of March 3, 2025.

In accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities.

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Matthew Kummell

Michael Sonnenshein

Peter Mintzberg

Directors & Executive Officers of the Sponsor as a group

(1) Includes 423,109 Shares held by Digital Currency Group, Inc.

and 320,453 Shares held by DCG International Investments Ltd., a wholly owned subsidiary of Digital Currency Group, Inc.

(2) On March 2, 2022, the Board approved the purchase by DCG, the parent company of the Sponsor, of up to $10 million worth of Shares of the Trust.

(1) Includes 342,380 Shares held by Digital Currency Group, Inc., 254,401 Shares held by DCG International Investments Ltd., a wholly owned subsidiary of Digital Currency Group, Inc., and 908 Shares held by Grayscale Securities, LLC, the Authorized Participant of the Trust and a wholly owned subsidiary of Digital Currency Group, Inc.

(2) On March 2, 2022, the Board approved the purchase by DCG, the indirect parent company of the Sponsor, of up to $10 million worth of Shares of the Trust.

Subsequently, DCG authorized such purchase.

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From March 2, 2022 through June 30, 2022, DCG has purchased a total of $2.0 million worth of Shares of the Trust.

From July 1, 2022 through February 19, 2024, DCG did not purchase any Shares of the Trust under this authorization.

From July 1, 2022 through March 3, 2025, DCG did not purchase any Shares of the Trust under this authorization.

(3) The Trust does not have any directors, officers or employees.

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* Represents beneficial ownership of less than 1%.

Unless otherwise indicated, the address for each shareholder listed in the table above is c/o Grayscale Investments, LLC, 290 Harbor Drive, 4 th Floor, Stamford, Connecticut 06902.

Unless otherwise indicated, the address for each shareholder listed in the table above is c/o Grayscale Investments Sponsors, LLC, 290 Harbor Drive, 4 th Floor, Stamford, Connecticut 06902.

Certain Relationships and Relate d Transactions and Director Independence

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Digital Currency Group, Inc.

is (i) the sole member and parent company of the Sponsor, and parent company of Genesis, the Liquidity Providers from October 3, 2022 through September 12, 2023, (ii) the indirect parent company of Grayscale Securities, the only acting Authorized Participant as of the date of this Annual Report, (iii) formerly the indirect parent company of the Index Provider (prior to its sale to an unaffiliated third party on November 20, 2023), (iv) a minority interest holder in Coinbase, Inc., which operates Coinbase, one of the Digital Asset Trading Platforms included in the Index, and which is also the parent company of the Custodian, representing less than 1.0% of its equity and (v) a minority interest holder in Kraken, one of the Digital Asset Trading Platforms included in the Index, representing less than 1.0% of its equity.

Digital Currency Group, Inc.

has investments in a large number of digital assets and companies involved in the digital asset ecosystem, including trading platforms and custodians.

Digital Currency Group, Inc.’s positions on changes that should be adopted in the Zcash Network could be adverse to positions that would benefit the Trust or its shareholders.

Additionally, before or after a hard fork, Digital Currency Group, Inc.’s position regarding which fork among a group of incompatible forks of the Zcash Network should be considered the “true” Zcash Network could be adverse to positions that would most benefit the Trust.

DCG is (i) the sole equity holder and indirect parent company of the Sponsor, (ii) the indirect parent company of Grayscale Securities, the only acting Authorized Participant as of the date of this Annual Report, and (iii) a minority interest holder in Kraken, one of the Digital Asset Trading Platforms included in the Index, representing less than 1.0% of its equity.

DCG has investments in a large number of digital assets and companies involved in the digital asset ecosystem, including trading platforms and custodians.

DCG’s positions on changes that should be adopted in the Zcash Network could be adverse to positions that would benefit the Trust or its shareholders.

Additionally, before or after a hard fork, DCG’s position regarding which fork among a group of incompatible forks of the Zcash Network should be considered the “true” Zcash Network could be adverse to positions that would most benefit the Trust.

The Sponsor has a conflict of interest in allocating its own limited resources among, when applicable, different clients and potential future business ventures, to each of which it owes fiduciary duties.

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The Sponsor and any affiliated service provider may, from time to time, have conflicting demands in respect of their obligations to the Trust and, in the future, to other clients.

It is possible that future business ventures of the Sponsor and affiliated service providers may generate larger fees, resulting in increased payments to employees, and therefore, incentivizing the Sponsor and/or the affiliated service providers to allocate it/their limited resources accordingly to the potential detriment of the Trust.

It is possible that future business ventures of the Sponsor and affiliated service providers may generate larger fees, resulting in increased payments to employees, and therefore, incentivizing the Sponsor and/or the affiliated service providers to allocate its/their limited resources accordingly to the potential detriment of the Trust.

There is an absence of arm’s length negotiation with respect to some of the terms of the Trust, and, where applicable, there has been no independent due diligence conducted with respect to the Trust.

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are FINRA-registered representatives who maintain their licenses through Grayscale Securities.

Prior to September 12, 2023, Genesis, an affiliate of the Trust and the Sponsor, had been engaged to act as one of the Liquidity Providers.

In its capacity as a Liquidity Provider, Genesis engaged in ZEC trading with the Trust’s affiliated entities.

For example, when the Sponsor received the Sponsor’s Fee in ZEC, it sold the ZEC through Genesis.

For this service, Genesis charged the Sponsor a transaction fee, which was not borne by the Trust.

Additionally, the Sponsor’s parent company, Digital Currency Group, Inc., is the sole shareholder and parent company of Genesis, in addition to a customer of Genesis, and may buy or sell ZEC through Genesis from time to time, independent of the Trust.

As of September 12, 2023, Genesis no longer serves as a Liquidity Provider.

Proprietary Trading/Other Clients

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Records of the Sponsor’s officers’ personal trading accounts will not be available for inspection by shareholders.

The Index Provider

Digital Currency Group, Inc.

was the indirect parent company of the Index Provider until the Index Provider was sold by Digital Currency Group, Inc.

to an unaffiliated third party in November 2023.

Prior to its sale by Digital Currency Group, Inc., the Index Provider was an affiliate of the Sponsor and the Trust and had an incentive to resolve questions regarding, or changes to, the manner in which the Index was constructed and in which the Index Price was calculated in a way that favored the Sponsor and the Trust.

Principal Accou ntant Fees and Services

Fees for services performed by Marcum LLP and Friedman LLP, prior to the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022, for the years ended December 31, 2023 and 2022 were:

Fees for services performed by KPMG LLP (“KPMG”), for the year ended December 31, 2024, and Marcum LLP (“Marcum”), for the year ended December 31, 2023.

Years Ended December 31,

(1) The Sponsor was notified that certain assets of Friedman LLP (“Friedman”), the Trust’s independent registered public accounting firm, were acquired by Marcum LLP (“Marcum”) effective September 1, 2022.

On September 27, 2022, the Audit Committee of the Board of Directors of the Sponsor approved the dismissal of Friedman and the engagement of Marcum to serve as the independent registered public accounting firm of the Trust.

As of September 1, 2022, the services previously provided by Friedman are provided by Marcum.

In the table above, in accordance with the SEC’s definitions and rules, Audit Fees are fees paid to Marcum for professional services for the audit of the Trust’s financial statements included in the annual report on Form 10-K and review of financial statements included in the quarterly reports on Form 10-Q, and for services that are normally provided by the accountants in connection with regulatory filings or engagements.

In the table above, in accordance with the SEC’s definitions and rules, Audit Fees are fees paid to KPMG, and previously Marcum, for professional services for the audit of the Trust’s financial statements included in the annual report on Form 10-K and review of financial statements included in the quarterly reports on Form 10-Q, and for services that are normally provided by the accountants in connection with regulatory filings or engagements.

Pre-Approved Policies and Procedures

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Such determinations, including for the fiscal year ended December 31, 2024, are made by the Sponsor’s Board of Directors and Audit Committee.

From and after January 1, 2025, such determinations are made by the Board of Directors of GSOIH and the Audit Committee of GSIS.

Exhibits and Fina ncial Statements Schedules

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2 to the Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.3 of the Registration Statement on Form 10 filed by the Registrant on June 29, 2022).

Amendment No.

3 to the Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by the Registrant on March 25, 2024).

Certificate of Amendment to Certificate of Trust (attached as Exhibit A to Amendment No.

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Amendment No.

1 to the Index License Agreement dated June 20, 2023, between the Sponsor and Index Provider (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on June 23, 2023).

1 to the Index License Agreement, dated June 20, 2023, between the Sponsor and Index Provider (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filed by the Registrant on June 23, 2023).

Amendment No.

6 to the Index License Agreement, dated March 1, 2025, between the Sponsor and Index Provider.

Transfer Agency and Service Agreement (incorporated by reference to Exhibit 10.4 of the Registration Statement on Form 10 filed by the Registrant on May 5, 2022).

Assignment and Assumption Agreement (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K filed by the Registrant on January 3, 2025).

Coinbase Assignment Agreement (incorporated by reference to Exhibit 10.2 of the current report on Form 8-K filed by the Registrant on January 3, 2025).

Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial Officer Pursuant to 18 U.S.C.

Certification by Principal Financial and Accounting Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

14 unchanged sentences

“ Agent ”—A Person appointed by the Trust to act on behalf of the shareholders in connection with any distribution of Incidental Rights and/or IR Virtual Currency.

“ AML ”—Anti-money laundering.

“ Authorized Participant ”—Certain eligible financial institutions that have entered into an agreement with the Trust and the Sponsor concerning the creation of Shares.

1 unchanged sentence

“ Basket ”—A block of 100 Shares.

“ Basket Amount ”—On any trade date, the number of ZEC required as of such trade date for each Creation Basket, as determined by dividing (x) the number of ZEC owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the number of ZEC representing the U.S.

“ Basket Amount ”—On any trade date, the amount of ZEC required as of such trade date for each Creation Basket, as determined by dividing (x) the amount of ZEC owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the amount of ZEC representing the U.S.

dollar value of accrued but unpaid fees and expenses of the Trust (converted using the Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ZEC ( i.e.

, carried to the eighth decimal place)), and multiplying such quotient by 100.

“ Bitcoin” or “BTC ”—A type of digital asset based on an open-source cryptographic protocol existing on the Bitcoin network.

“ Blockchain ” or “ Zcash Blockchain ”—The public transaction ledger of the Zcash Network on which transactions in ZEC are recorded.

“ Binance ”—Binance Holdings Ltd.

“ Bitcoin” —A type of digital asset based on an open-source cryptographic protocol existing on the Bitcoin Network.

“ Bitcoin Network ”—The online, end-user-to-end-user network hosting a public transaction ledger, known as the blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Bitcoin Network.

“ Blockchain ”—The public transaction ledger of the Zcash Network on which transactions in ZEC are recorded.

“ CDI ”—CoinDesk Indices, Inc., with its affiliates, including CC Data Limited.

“ CEA ”—Commodity Exchange Act of 1936, as amended.

“ CFPB ”—The Consumer Financial Protection Bureau.

“ CFTC ”—The U.S.

Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures and option markets in the United States.

“ CME ”—The Chicago Mercantile Exchange.

“ Code ”—The U.S.

Internal Revenue Code of 1986, as amended.

“ Coinbase ”—Coinbase, Inc.

“ Covered Person ”—The Sponsor and its affiliates.

11 unchanged sentences

The largest Digital Asset Trading Platforms are online and typically trade on a 24-hour basis, publishing transaction price and volume data.

“ Digital Asset Trading Platform Market ”—The global exchange market for the trading of ZEC, which consists of transactions on electronic Digital Asset Trading Platforms.

“ Digital Asset Trading Platform Market ”—The global trading platform market for the trading of ZEC, which consists of transactions on electronic Digital Asset Trading Platforms.

“ DSTA ”—The Delaware Statutory Trust Act, as amended.

9 unchanged sentences

“ FINRA ”—The Financial Industry Regulatory Authority, Inc., which is the primary regulator in the United States for broker-dealers, including Authorized Participants.

“ GAAP ”—United States generally accepted accounting principles.

“ Genesis ”—Genesis Global Trading, Inc., a wholly owned subsidiary of Digital Currency Group, Inc., which served as a Liquidity Provider from October 3, 2022 through September 12, 2023.

“ FSMA ”—The Financial Services and Markets Act 2023.

“ FTX ”—FTX Trading Ltd.

“ Genesis ”—Genesis Global Trading, Inc., a wholly owned subsidiary of Digital Currency Group, Inc.

“ Grayscale Securities ”—Grayscale Securities, LLC, a wholly owned subsidiary of the Sponsor, which as of the date of this Annual Report, is the only acting Authorized Participant.

“ GSI ”—Grayscale Investments, LLC, the Sponsor of the Trust, until December 31, 2024.

“ GSIS ”—Grayscale Investments Sponsors, LLC, a Delaware limited liability company, the Sponsor of the Trust from and after January 1, 2025 and a wholly owned direct subsidiary of Grayscale Operating, LLC.

“ GSO ”—Grayscale Operating, LLC, a Delaware limited liability company and a wholly owned indirect subsidiary of Digital Currency Group, Inc.

“ GSOIH ”—GSO Intermediate Holdings Corporation, a Delaware corporation formed in connection with the Reorganization which is the sole managing member of GSO, and an indirect subsidiary of DCG.

“ ICE ”—Intercontinental Exchange.

“ Incidental Rights ”—Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of ZEC and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust.

“ Index ”—The CoinDesk Zcash Price Index (ZCX).

“ Index License Agreement ”—The license agreement, dated as of February 1, 2022, between the Index Provider and the Sponsor governing the Sponsor’s use of the Index for calculation of the Index Price, as amended by Amendment No.

1 thereto and as the same may be amended from time to time.

“ Index Price ”—The U.S.

3 unchanged sentences

“ Index Provider ”—CoinDesk Indices, Inc., a Delaware corporation that publishes the Index.

Prior to its sale to an unaffiliated third party on November 20, 2023, DCG was the indirect parent company of CoinDesk Indices, Inc.

As a result, CoinDesk Indices, Inc.

was an affiliate of the Sponsor and the Trust and was considered a related party of the Trust.

“ Investment Advisers Act ”—Investment Advisers Act of 1940, as amended.

2 unchanged sentences

“ IR Virtual Currency ”—Any virtual currency tokens, or other asset or right, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

“ IRAs ”—Individual retirement accounts.

“ IRS ”—The U.S.

1 unchanged sentence

Department of the Treasury.

“ KYC ”—Know-your-customer.

“ Layer 1 ”—The underlying smart contract platform blockchain on which a digital asset functions.

2 unchanged sentences

“ Marketing Fee ”—Fee payable to the marketer for services it provides to the Trust, which the Sponsor will pay to the marketer as a Sponsor-paid Expense.

“ Merger ”—The merger of Grayscale Investments, LLC with and into Grayscale Operating, LLC, with Grayscale Operating, LLC continuing as the surviving company.

“ MiCA ”—The Markets in Crypto-Assets Regulation, which was approved by the Parliament of the European Union in 2023.

“ MSB ”—A money services business.

“ NAV ”—The aggregate value, expressed in U.S.

2 unchanged sentences

Business—Valuation of ZEC and Determination of NAV.” See also “Item 1.

Business—Investment Objective” for a description of the Trust’s Principal Market NAV, as calculated in accordance with GAAP.

Business—Investment Objective” for a description of the Trust’s Principal Market NAV, as calculated in accordance with U.S.

Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings.

1 unchanged sentence

“ NAV Fee Basis Amount ”—The amount on which the Sponsor’s Fee for the Trust is based, as calculated in the manner set forth under “Item 1.

Business—Valuation of ZEC and Determination of NAV.” For purposes of the Trust Agreement, the term ZEC Holdings Basis Amount shall mean the NAV Fee Basis Amount as defined herein.

“ OTCQX ”—The OTCQX tier of OTC Markets Group Inc.

Business—Valuation of ZEC and Determination of NAV.” For purposes of the Trust Agreement, the term ZEC Holdings Fee Basis Amount shall mean the NAV Fee Basis Amount as defined herein.

“ Non-ERISA Arrangements ”—Government plans, non-U.S.

plans and certain church plans, which are not subject to the fiduciary responsibility or prohibited transaction provisions of ERISA or Section 4975 of the Code, but may be subject to similar rules under Similar Laws.

“ NYSE Arca ”—NYSE Arca, Inc.

“ OTCQX ”—The OTCQX Best Market ® of OTC Markets Group Inc.

“ Participant Agreement ”—An agreement entered into by an Authorized Participant with the Sponsor that provides the procedures for the creation of Baskets and for the delivery of ZEC required for Creation Baskets.

“ Plans ”—Employee benefit plans and certain other plans and arrangements, including IRAs and annuities, Keogh plans, and certain collective investment funds or insurance company general or separate accounts in which such plans or arrangements are invested, that are subject to ERISA and/or the Section 4975 of the Code.

“ Pre-Creation Abandonment ”—The abandonment by the Trust, irrevocably for no direct or indirect consideration, all Incidental Rights and IR Virtual Currency to which the Trust would otherwise be entitled, effective immediately prior to a Creation Time for the Trust.

“ Pre-Creation Abandonment Notice ”—A notice delivered by the Sponsor to the Custodian, on behalf of the Trust, stating that the Trust is abandoning irrevocably for no direct or indirect consideration, effective immediately prior to each Creation Time, all Incidental Rights and IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which the Trust has not taken any Affirmative Action at or prior to such time.

“ Principal Market NAV ”—The net asset value of the Trust determined on a GAAP basis.

“ Principal Market NAV ”—The net asset value of the Trust determined on a U.S.

Prior to February 23, 2024, Principal Market NAV was referred to as NAV.

“ Reorganization ”—The internal corporate reorganization of Grayscale Investments, LLC consummated on January 1, 2025.

“ SEC ”—The U.S.

Securities and Exchange Commission.

“ Secondary Market ”—Any marketplace or other alternative trading system, as determined by the Sponsor, on which the Shares may then be listed, quoted or traded, including but not limited to, the OTCQX tier of the OTC Markets Group Inc.

“ Secondary Index ”—The Coin Metrics Real-Time Rate.

“ Secondary Index Price ”—The price set by Coin Metrics Real-Time Rate as of 4:00 p.m., New York time, on the valuation date.

Business—Overview of the ZEC Industry and Market—ZEC Value—The Index and the Index Price—Determination of the Index Price When Index Price is Unavailable” for a description of how the Secondary Index Price is utilized when the Index Price is unavailable.

“ Secondary Index Provider ”—Coin Metrics Inc., a Delaware corporation that publishes the Secondary Index.

“ Securities Act ”—The Securities Act of 1933, as amended.

“ Shares ”—Common units of fractional undivided beneficial interest in, and ownership of, the Trust.

“ Share Percentage ”—A fraction the numerator of which is the number of Shares disposed of and the denominator of which is the total number of Shares held by such U.S.

Holder immediately prior to such sale or other disposition.

“ Similar Laws ”—Rules under other federal, state, local, non-U.S.

or other applicable law that are similar to ERISA or Section 4975 of the Code.

“ SIPC ”—The Securities Investor Protection Corporation.

“ Sponsor ”—Grayscale Investments, LLC.

“ Sponsor ” or “ Co-Sponsor ”—The sponsor of the Trust.

Grayscale Investments, LLC was the sponsor of the Trust before January 1, 2025, Grayscale Operating, LLC is a co-sponsor of the Trust from January 1, 2025 to May 3, 2025, and Grayscale Investments Sponsors, LLC is a co-sponsor of the Trust from January 1, 2025 to May 3, 2025 and will be the sole remaining sponsor thereafter.

“ Sponsor Contracts ”—Certain contracts assigned by GSO pertaining to its role as Sponsor (as such term is defined in the Trust Agreement) of the Trust to GSIS in connection with the Reorganization.

“ Sponsor-paid Expenses ”—The fees and expenses incurred by the Trust in the ordinary course of its affairs that the Sponsor is obligated to assume and pay, excluding taxes, but including:

3 unchanged sentences

provided that for a day that is not a business day, the calculation of the Sponsor’s Fee will be based on the NAV Fee Basis Amount from the most recent business day, reduced by the accrued and unpaid Sponsor’s Fee for such most recent business day and for each day after such most recent business day and prior to the relevant calculation date.

“ Tertiary Pricing Option ”—The price set by the Trust’s principal market.

“ Total Basket Amount ”—With respect to any creation order, the applicable Basket Amount multiplied by the number of Baskets being created.

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“ Trust Agreement ”—The Amended and Restated Declaration of Trust and Trust Agreement between the Trustee and the Sponsor establishing and governing the operations of the Trust, as amended by Amendments No.

2 thereto and as the same may be amended from time to time.

“ Trustee ”—Delaware Trust Company (formerly known as CSC Trust Company of Delaware), a Delaware trust company, is the Delaware trustee of the Trust.

3 thereto and as the same may be further amended from time to time.

“ Trustee ”—CSC Delaware Trust Company (formerly known as Delaware Trust Company), a Delaware trust company, is the Delaware trustee of the Trust.

“ UBTI ”—Unrelated business taxable income.

”—United States.

dollar ” or “ $ ”—United States dollar or dollars.

GAAP ”—United States generally accepted accounting principles.

“ Zcash ” or “ Zcash Network ”—The online, end-user-to-end-user network hosting the public transaction ledger, known as the Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Zcash Network.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

Grayscale Investments, LLC

as Sponsor of Grayscale Zcash Trust (ZEC)

/s/ Michael Sonnenshein

Michael Sonnenshein

Grayscale Investments Sponsors, LLC, as Sponsor of Grayscale Zcash Trust (ZEC)

/s/ Peter Mintzberg

Peter Mintzberg

Member of the Board of Directors and Chief Executive Officer (Principal Executive Officer)*

/s/ Edward McGee

Member of the Board of Directors and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)*

Member of the Board of Directors and Chief Financial Officer (Principal Financial and Accounting Officer)*

/s/ Mark Shifke

3 unchanged sentences

Member of the Board of Directors

February 23, 2024

* The Registrant is a trust and the persons are signing in their capacities as officers or directors of Grayscale Investments, LLC, the Sponsor of the Registrant.

March 7, 2025

* The Registrant is a trust and the persons are signing in their capacities as officers of Grayscale Operating, LLC, the sole member of Grayscale Investments Sponsors, LLC, the Sponsor of the Registrant, or directors of GSO Intermediate Holdings Corporation, the sole managing member of Grayscale Operating, LLC, as applicable.

INDEX TO FINANCIAL STATEMENTS

Grayscale Zcash Trust (ZEC) Annual Financial Statements

Reports of Independent Registered Public Accounting Firms (Marcum LLP, PCAOB ID 688 ;

Friedman LLP, PCAOB ID 711 )

Reports of Independent Registered Public Accounting Firms (KPMG LLP, PCAOB ID 185 ;

Marcum LLP, PCAOB ID 688 )

Statements of Assets and Liabilities at December 31, 2024 and 2023

7 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investment, of Grayscale Zcash Trust (ZEC) (the “Trust”) as of December 31, 2023 and 2022, and the related statements of operations and changes in net assets for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2023 and 2022, and the results of its operations for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying statement of assets and liabilities of Grayscale Zcash Trust (ZEC) (the Trust), including the schedule of investment, as of December 31, 2024, the related statements of operations, and changes in net assets for the year then ended, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2024, and the results of its operations and the changes in its net assets for the year then ended, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the management of the Trust’s Sponsor, Grayscale Investments, LLC.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audits.

These financial statements are the responsibility of the Trust’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter - Investment in ZEC

In forming our opinion, we have considered the adequacy of the disclosures included in Note 7 to the financial statements concerning among other things the risks and uncertainties related to the Trust’s investment in ZEC and Incidental Rights or IR Virtual Currency that arise as a result of the Trust’s investment in ZEC.

The risks and rewards to be recognized by the Trust associated with its investment in ZEC will be dependent on many factors outside of the Trust’s control.

The currently immature nature of the ZEC market including clearing, settlement, custody and trading mechanisms, the dependency on information technology to sustain ZEC continuity, as well as valuation and volume volatility all subject ZEC to unique risks of theft, loss, or other misappropriation as well as valuation uncertainty.

Furthermore, these factors also contribute to the significant uncertainty with respect to the future viability and value of ZEC.

Our opinion is not qualified in respect to this matter.

/s/ Marcum LLP

We have served as the Trust’s auditor since 2018 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022).

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We have served as the Trust’s auditor since 2024.

New York, New York

February 23, 2024

March 7, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

Opinion on the Financial Statements

We have audited the statements of operations and changes in net assets of Grayscale Zcash Trust (ZEC) (the “Trust”) for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the results of the Trust’s operations for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying statements of assets and liabilities, including the schedule of investment, of Grayscale Zcash Trust (ZEC) (the “Trust”) as of December 31, 2023, and the related statements of operations and changes in net assets for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2023, and the results of its operations for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the management of the Trust’s Sponsor, Grayscale Investments, LLC.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audit.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Emphasis of Matter - Investments in ZEC

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter - Investment in ZEC

3 unchanged sentences

Our opinion is not qualified in respect to this matter.

/s/ Friedman LLP

We have served as the Trust’s auditor from 2018 through 2022.

East Hanover, New Jersey

/s/ Marcum LLP

We have served as the Trust’s auditor from 2018 to 2024 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022).

New York, New York

February 23, 2024

5 unchanged sentences

Total liabilities

Net Assets consists of:

Paid-in-capital

Accumulated net investment loss

Accumulated net realized loss on investment in ZEC

Accumulated net change in unrealized depreciation on investment in ZEC

Shares issued and outstanding, no par value ( unlimited Shares authorized)

21 unchanged sentences

Net investment loss

Net realized and unrealized (loss) gain from:

Net realized (loss) gain on investment in ZEC

Net change in unrealized (depreciation) appreciation on investment in ZEC

Net realized and unrealized (loss) gain on investment

Net (decrease) increase in net assets resulting from operations

Net realized and unrealized gain (loss) from:

Net realized loss on investment in ZEC

Net change in unrealized depreciation on investment in ZEC

Net realized and unrealized gain (loss) on investment

Net increase (decrease) in net assets resulting from operations

See accompanying notes to financial statements.

3 unchanged sentences

Years Ended December 31,

(Decrease) increase in net assets from operations:

Increase (decrease) in net assets from operations:

Net investment loss

Net realized (loss) gain on investment in ZEC

Net change in unrealized (depreciation) appreciation on investment in ZEC

Net (decrease) increase in net assets resulting from operations

Net realized loss on investment in ZEC

Net change in unrealized depreciation on investment in ZEC

Net increase (decrease) in net assets resulting from operations

Increase in net assets from capital share transactions:

1 unchanged sentence

Net increase in net assets resulting from capital share transactions

Total (decrease) increase in net assets from operations and capital share transactions

Total increase (decrease) in net assets from operations and capital share transactions

Beginning of year

12 unchanged sentences

The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program.

The Trust’s investment objective is for the value of the Shares (based on ZEC per Share) to reflect the value of ZEC held by the Trust, less the Trust’s expenses and other liabilities.

The Trust’s investment objective is for the value of the Shares (based on ZEC per Share) to reflect the value of the ZEC held by the Trust, less the Trust’s expenses and other liabilities.

The Trust may also receive Incidental Rights and/or IR Virtual Currency as a result of the Trust’s investment in ZEC, in accordance with the terms of the Trust Agreement.

1 unchanged sentence

IR Virtual Currency is any virtual currency tokens, or other asset or right, received by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

Grayscale Investments, LLC (“Grayscale” or the “Sponsor”) acts as the Sponsor of the Trust and is a wholly owned subsidiary of Digital Currency Group, Inc.

As of December 31, 2024, Grayscale Investments, LLC (“Grayscale” or the “Sponsor”) acted as the Sponsor of the Trust and was a wholly owned subsidiary of Digital Currency Group, Inc.

The Sponsor is responsible for the day-to-day administration of the Trust pursuant to the provisions of the Trust Agreement.

1 unchanged sentence

As partial consideration for the Sponsor’s services, the Trust pays Grayscale a Sponsor’s Fee as discussed in Note 6.

The Sponsor also acts as the sponsor and manager of other investment products including Grayscale Basic Attention Token Trust (BAT) (OTCQB:

GBAT), Grayscale Bitcoin Trust (BTC) (NYSE Arca:

The Sponsor also acts as the sponsor and manager of other investment products including Grayscale Aave Trust (AAVE), Grayscale Avalanche Trust (AVAX), Grayscale Basic Attention Token Trust (BAT) (OTCQX:

GBAT), Grayscale Bitcoin Trust ETF (NYSE Arca:

GBTC), Grayscale Bitcoin Cash Trust (BCH) (OTCQX:

BCHG), Grayscale Chainlink Trust (LINK) (OTCQB:

BCHG), Grayscale Bitcoin Mini Trust ETF (NYSE Arca:

BTC), Grayscale Bittensor Trust (TAO), Grayscale Chainlink Trust (LINK) (OTCQX:

GLNK), Grayscale Decentraland Trust (MANA) (OTCQX:

MANA), Grayscale Ethereum Trust (ETH) (OTCQX:

MANA), Grayscale Dogecoin Trust (DOGE), Grayscale Ethereum Trust ETF (NYSE Arca:

ETHE), Grayscale Ethereum Classic Trust (ETC) (OTCQX:

ETCG), Grayscale Filecoin Trust (FIL) (OTCQB:

ETCG), Grayscale Ethereum Mini Trust ETF (NYSE Arca:

ETH), Grayscale Filecoin Trust (FIL) (OTC Markets:

FILG), Grayscale Horizen Trust (ZEN) (OTCQX:

HZEN), Grayscale Litecoin Trust (LTC) (OTCQX:

LTCN), Grayscale Livepeer Trust (LPT) (OTCQB:

GLIV), Grayscale Solana Trust (SOL) (OTCQB:

GSOL), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

GXLM), Grayscale Decentralized Finance (DeFi) Fund LLC (OTCQB:

HZEN), Grayscale Lido DAO Trust (LDO), Grayscale Litecoin Trust (LTC) (OTCQX:

LTCN), Grayscale Livepeer Trust (LPT) (OTCQX:

GLIV), Grayscale MakerDao Trust (MKR), Grayscale NEAR Trust (NEAR), Grayscale Optimism Trust (OP), Grayscale Pyth Trust (PYTH), Grayscale Solana Trust (SOL) (OTCQX:

GSOL), Grayscale Stacks Trust (STX), Grayscale Stellar Lumens Trust (XLM) (OTCQX:

GXLM), Grayscale Sui Trust (SUI), Grayscale XRP Trust, Grayscale Zcash Trust (ZEC) (OTCQX:

ZCSH), Grayscale Decentralized AI Fund LLC, Grayscale Decentralized Finance (DeFi) Fund LLC (OTCQB:

DEFG), Grayscale Digital Large Cap Fund LLC (OTCQX:

1 unchanged sentence

The following investment products sponsored or managed by the Sponsor are also SEC reporting companies with their shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Trust (ETH), Grayscale Ethereum Classic Trust (ETC), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC), Grayscale Stellar Lumens Trust (XLM), and Grayscale Digital Large Cap Fund LLC.

On January 10, 2024, the Securities and Exchange Commission (the “SEC”) approved an application under Rule 19b-4 of the Exchange Act by NYSE Arca, Inc.

(“NYSE Arca”) to list the shares of the Grayscale Bitcoin Trust (BTC), which began trading on NYSE Arca on January 11, 2024.

Grayscale Bitcoin Trust (BTC) is an SEC reporting company with its shares registered pursuant to Section 12(b) of the Exchange Act.

Grayscale Advisors, LLC, a Registered Investment Advisor and an affiliate of the Sponsor, is the advisor to the Grayscale Future of Finance (NYSE:

GFOF) product.

Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Classic Trust (ETC), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC), Grayscale Stellar Lumens Trust (XLM), and Grayscale Digital Large Cap Fund LLC.

The following investment products sponsored by the Sponsor are also SEC reporting companies with their shares registered pursuant to Section 12(b) of the Exchange Act:

Grayscale Bitcoin Trust ETF, Grayscale Ethereum Trust ETF, Grayscale Bitcoin Mini Trust ETF, and Grayscale Ethereum Mini Trust ETF.

Authorized Participants of the Trust are the only entities who may place orders to create or, if permitted, redeem Baskets.

Grayscale Securities, LLC (“Grayscale Securities” or, in such capacity, an “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary of the Sponsor, is the only Authorized Participant, and is party to a participant agreement with the Sponsor and the Trust.

Grayscale Securities, LLC (“Grayscale Securities” or, in such capacity, an “Authorized Participant”), a registered broker-dealer and affiliate of the Sponsor, is the only Authorized Participant, and is party to a participant agreement with the Sponsor and the Trust.

Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor.

Liquidity Providers may be engaged from time to time and at any time.

Liquidity Providers who are unaffiliated with the Trust may be engaged from time to time and at any time.

Genesis Global Trading, Inc.

(“Genesis”), a wholly owned subsidiary of DCG, served as a Liquidity Provider from October 3, 2022 to September 12, 2023.

Unaffiliated Liquidity Providers have since been engaged, and additional Liquidity Providers who are unaffiliated with the Trust may be engaged in the future.

The custodian of the Trust is Coinbase Custody Trust Company, LLC (the “Custodian”), a third-party service provider.

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The responsibilities of the Transfer Agent are to maintain creations, redemptions, transfers, and distributions of the Trust’s Shares which are primarily held in book-entry form.

On October 18, 2021, the Trust received notice that its Shares were qualified for public trading on the OTCQX U.S.

Marketplace of the OTC Markets Group, Inc.

On October 18, 2021, the Trust received notice that its Shares were qualified for public trading on the OTCQX Best Market ® (“OTCQX”) of OTC Markets Group, Inc.

The Trust’s trading symbol on OTCQX is “ZCSH” and the CUSIP number for its Shares is 38963R105.

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The following is a summary of significant accounting policies followed by the Trust:

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

The Trust qualifies as an investment company for accounting purposes pursuant to the accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies .

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GAAP (“Principal Market NAV”), the Trust follows ASC 820-10, which outlines the application of fair value accounting.

GAAP (“Principal Market NAV”), the Trust follows ASC Topic 820-10 Fair Value Measurement , which outlines the application of fair value accounting.

ASC 820-10 determines fair value to be the price that would be received for ZEC in a current sale, which assumes an orderly transaction between market participants on the measurement date.

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The cost basis of ZEC received in connection with a creation order is recorded by the Trust at the fair value of ZEC at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis of ZEC received by the Trust in connection with a creation order is recorded by the Trust at the fair value of ZEC at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

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Investment in ZEC

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

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The Trust adopted this new guidance on January 1, 2024 , with no material impact on its financial statements and disclosures as the Trust historically used fair value as its method of accounting for ZEC in accordance with its classification as an investment company for accounting purposes.

In this reporting period, the Trust adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) —Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

Adoption of the new standard impacted financial statement disclosures only and did not affect the Trust’s financial position or the results of its operations.

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance.

The Chief Executive Officer and Chief Financial Officer of the Sponsor act as the Trust’s CODM.

The Trust represents a single operating segment, as the CODM monitors the operating results of the Trust as a whole and the Trust’s passive investment objective is pre-determined in accordance with the terms of the Trust Agreement.

The financial information in the form of the Trust’s total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations and capital share transactions), which are used by the CODM to assess the segment’s performance, are consistent with that presented within the Trust’s financial statements.

Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only significant segment expense, the Sponsor’s fee, related party, is included in the accompanying Statements of Operations.

Fair Value of ZEC

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ZEC contributed

132,687.71392083

ZEC distributed for Sponsor’s Fee, related party

( 8,400.03167884

Net change in unrealized appreciation on investment in ZEC

Net realized gain on investment in ZEC

Net change in unrealized depreciation on investment in ZEC

Net realized loss on investment in ZEC

Balance at December 31, 2022

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ZEC contributed

78,192.38923032

ZEC distributed for Sponsor’s Fee, related party

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The creation and redemption of Baskets on behalf of investors are made by the Authorized Participant in exchange for the delivery of ZEC to the Trust or the distribution of ZEC by the Trust.

The number of ZEC required for each creation Basket or redemption Basket is determined by dividing (x) the number of ZEC owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the number of ZEC representing the U.S.

The amount of ZEC required for each creation Basket or redemption Basket is determined by dividing (x) the amount of ZEC owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the amount of ZEC representing the U.S.

dollar value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 100.

Each Share represented approximately 0.0835 and 0.0857 of one ZEC at December 31, 2024 and 2023, respectively.

The decrease in the number of ZEC represented by each Share is primarily a result of the periodic withdrawal of ZEC to pay the Sponsor’s Fee.

The cost basis of investments in ZEC recorded by the Trust is the fair value of ZEC, as determined by the Trust, at 4:00 p.m., New York time, on the date of transfer to the Trust by the Authorized Participant based on the creation Baskets.

The decrease in the amount of ZEC represented by each Share is primarily a result of the periodic withdrawal of ZEC to pay the Sponsor’s Fee.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of each Share to investors.

The Authorized Participant may realize significant profits buying, selling, creating, and, if permitted, redeeming Shares as a result of changes in the value of Shares or ZEC.

The Authorized Participant, or Liquidity Provider, may realize significant profits buying, selling, creating, and, if permitted, redeeming Shares as a result of changes in the value of Shares or ZEC.

At this time, the Trust is not operating a redemption program and is not accepting redemption requests.

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federal income tax.

Rather, if the Trust is a grantor trust, each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each beneficial owner of Shares.

Rather, if the Trust is a grantor trust, each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income, gains, losses and deductions will “flow through” to each beneficial owner of Shares.

If the Trust were not properly classified as a grantor trust, the Trust might be classified as a partnership for U.S.

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However, due to the uncertain treatment of digital assets, including forks, airdrops and similar occurrences for U.S.

income tax purposes, there can be no assurance in this regard.

federal income tax purposes, there can be no assurance in this regard.

If the Trust were classified as a partnership for U.S.

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federal income tax (currently at the rate of 21 %) on its net taxable income and certain distributions made by the Trust to shareholders would be treated as taxable dividends to the extent of the Trust’s current and accumulated earnings and profits.

In accordance with GAAP, the Trust has defined the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not” threshold, based on the largest benefit that is more than 50 % likely to be realized.

In accordance with U.S.

GAAP, the Trust has defined the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not” threshold, based on the largest benefit that is more than 50 % likely to be realized.

Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current period.

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The Trust considered the following entities, their directors, and certain employees to be related parties of the Trust as of December 31, 2024:

DCG, Genesis, Grayscale, and Grayscale Securities.

DCG, Grayscale, and Grayscale Securities.

As of December 31, 2024 and 2023, 741,843 and 875,407 , Shares of the Trust were held by related parties of the Trust, respectively.

On November 20, 2023, it was announced that CoinDesk Indices, Inc., the Index Provider, previously an affiliate of the Sponsor and the Trust at the time of this event, was acquired by an unaffiliated third party.

This transaction did not have any impact on the Trust, or disrupt the operations of the Trust.

The Sponsor’s parent, an affiliate of the Trust, holds a minority interest in Coinbase, Inc., the parent company of the Custodian, that represents less than 1.0 % of Coinbase, Inc.’s ownership.

Genesis Global Trading, Inc.

filed a certificate of dissolution in August 2024, and has therefore been removed from the list of related parties.

In accordance with the Trust Agreement governing the Trust, the Trust pays a fee to the Sponsor, calculated as 2.5 % of the aggregate value of the Trust’s assets, less its liabilities (which include any accrued but unpaid expenses up to, but excluding, the date of calculation), as calculated and published by the Sponsor or its delegates in the manner set forth in the Trust Agreement (the “Sponsor’s Fee”).

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the costs of maintaining the Trust’s website and applicable license fees (together, the “Sponsor-paid Expenses”), provided that any expense that qualifies as an Additional Trust Expense will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

The Trust may incur certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders (including in connection with any Incidental Rights and any IR Virtual Currency), any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, the fees and expenses related to the listing, quotation or trading of the Shares on any secondary market (including legal, marketing and audit fees and expenses) to the extent exceeding $ 600,000 in any given fiscal year and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters (collectively “Additional

Trust Expenses”).

In such circumstances, the Sponsor or its delegate (i) will instruct the Custodian to withdraw from the Digital Asset Account ZEC, Incidental Rights and/or IR Virtual Currency in such quantity as may be necessary to permit payment of such Additional Trust Expenses and (ii) may either (x) cause the Trust (or its delegate) to convert such ZEC, Incidental Rights and/or IR Virtual Currency into U.S.

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For the years ended December 31, 2024, 2023 and 2022 , the Sponsor did no t pay any Additional Trust Expenses on behalf of the Trust.

On March 2, 2022, the Board of the Sponsor (the “Board”) approved the purchase by DCG, the parent company of the Sponsor, of up to $ 10 million worth of Shares of the Trust.

On March 2, 2022, the board of the Sponsor (the “Board”) approved the purchase by DCG, the indirect parent company of the Sponsor, of up to $ 10 million worth of Shares of the Trust.

Subsequently, DCG authorized such purchase.

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Investing in ZEC is currently highly speculative and volatile.

The net asset value of the Trust, calculated by reference to the principal market price, relates primarily to the value of ZEC held by the Trust, and fluctuations in the price of ZEC could materially and adversely affect an investment in the Shares of the Trust.

The Principal Market NAV of the Trust, calculated by reference to the principal market price in accordance with U.S.

GAAP, relates primarily to the value of the ZEC held by the Trust, and fluctuations in the price of ZEC could materially and adversely affect an investment in the Shares of the Trust.

The price of ZEC has a limited history.

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As a result, any incorrectly executed ZEC transactions could adversely affect an investment in the Shares.

The SEC has stated that certain digital assets may be considered “securities” under the federal securities laws.

The Securities and Exchange Commission (the “SEC”) has stated that certain digital assets may be considered “securities” under the federal securities laws.

The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict.

Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC did not consider Bitcoin or Ethereum to be securities, and does not currently consider Bitcoin to be a security.

Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC did not consider Bitcoin or Ether to be securities, and does not currently consider Bitcoin to be a security.

The SEC staff has also provided informal assurances via no-action letter to a handful of promoters that their digital assets are not securities.

On the other hand, the SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities.

On the other hand, the SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities and has not formally or explicitly confirmed that it does not deem Ether to be a security.

If ZEC is determined to be a “security” under federal or state securities laws by the SEC or any other agency, or in a proceeding in a court of law or otherwise, it may have material adverse consequences for ZEC.

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Net realized loss on investment in ZEC

Net change in unrealized appreciation (depreciation) on investment in ZEC

Net change in unrealized depreciation on investment in ZEC

Net realized and unrealized gain (loss) on investment

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Net realized loss on investment in ZEC

Net change in unrealized appreciation (depreciation) on investment in ZEC

Net change in unrealized depreciation on investment in ZEC

Net realized and unrealized gain (loss) on investment

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Principal market net asset value, beginning of year

Net (decrease) increase in net assets from investment operations:

Net increase (decrease) in net assets from investment operations:

Net investment loss

Net realized and unrealized (loss) gain

Net (decrease) increase in net assets resulting from operations

Net realized and unrealized gain (loss)

Net increase (decrease) in net assets resulting from operations

Principal market net asset value, end of year

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Subsequent Events

As of the close of business on February 19, 2024 , the fair value of ZEC determined in accordance with the Trust’s accounting policy was $ 26.31 per ZEC.

The Reorganization is not expected to have any material impact on the operations of the Trust.

Other than the assumption of the Sponsor Contracts by GSIS, the Reorganization does not alter the rights or obligations under any of the Sponsor Contracts.

GSIS shall be subject to the rights and obligations of a Sponsor under the Trust Agreement.

On January 3, 2025, GSO voluntarily withdrew as a Sponsor of the Trust pursuant to the terms of the Trust Agreement, and, effective May 3, 2025, GSIS shall be the sole remaining Sponsor of the Trust.

As of the close of business on March 3, 2025 , the fair value of ZEC determined in accordance with the Trust’s accounting policy was $ 37.48 per ZEC.

There are no known events that have occurred that require disclosure other than that which has already been disclosed in these notes to the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis