Anchorage Digital Bank Join Coinbase to own BitGo 21Shares crypto ETFs
Asset manager 21Shares is adding Anchorage Digital Bank and BitGo as custodians of the space's cryptocurrency exchange-traded funds (ETFs), according to a Sept. 12 announcement.
Anchorage Digital Bank and Bitgo will join Coinbase, the existing custodian of Bitcoin (BTC) and Ether (ETH), for 21Shares' two US-based crypto ETFs, ARK 21Shares Bitcoin ETF (ARKB) and 21Shares Core Ethereum ETF (CETH). ).
“We consider our security partners to be critical to risk management […] Our product alignment, and diversification adds to the safety and security of our offering,” said Andres Valencia, head of investment management at 21Shares, in a statement.
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21Shares is one of the first US-based crypto ETF issuers to expand its list of investors beyond Coinbase.
“We think we will continue to see issuers increase custodians to reduce the risk of a downside risk,” said Nate Geracchi, president of ETF Stores, an investment advisor, in a post on the X forum.
Custodians of digital assets often require a New York trust charter. Source: NYDFS
Regulated digital asset custodians are proliferating in the US. In August, Cointelegraph reported that FireBlocks — itself best known for its treasury management products — received approval from New York's financial regulator to hold assets of US clients.
Other institutional crypto companies – including Coinbase Custody Trust, Fidelity Digital Asset Services and PayPal Digital – are similarly licensed.
Qualified crypto custodians adhere to strict standards for secure crypto storage – including cold storage wallets and Multi-Party Computing (MPC) to authorize transactions – and generally protect depositors from exploitation.
The ARK 21Shares Bitcoin ETF holds about $2.5 billion in BTC. Source: 21sher
The U.S. Securities and Exchange Commission has been cracking down on investment managers who have failed to comply with the Safeguard Rule, which sets guidelines to protect investors' money.
In September, the SEC sued fund adviser Galois Capital Management for failing to properly handle client assets, including holding investor funds at the now-defunct cryptocurrency exchange FTX.
Anchorage Digital Bank — a federally chartered bank — aims to provide funders with “the regulatory certainty and security profile to streamline access to crypto through a streamlined ETP wrapper,” Anchorage Digital Bank CEO Nathan McAuley said in a statement.
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