Grayscale Ethereum ETF Custodian Now Continues To Trust Coinbase

Key Points:

• Coinbase was selected as the Grayscale Ethereum ETF custodian, adding to Coinbase’s role with multiple planned Ethereum ETFs.
• Experts warn about security risks due to Coinbase’s centralization in the ETF market.

In a fresh filing with the U.S. Securities and Exchange Commission, Grayscale has chosen Coinbase as the custodian for its proposed Ethereum ETF, according to a Decrypt report.

Grayscale Ethereum ETF Custodian Continues As Coinbase

The news confirms that Coinbase will be the Grayscale Ethereum ETF custodian, further solidifying its place in the cryptocurrency ETF market.

An ETF is a financial product that enables investors to buy shares that track the value of an underlying asset, including gold, foreign currencies, or cryptocurrencies. Just like the spot Bitcoin ETFs, these spot Ethereum ETFs will hold Ethereum and give investors exposure to the digital asset.

Not only is Grayscale Ethereum ETF custodian, Coinbase is the custodian for 90% of the assets in U.S. spot Bitcoin ETFs. It is now on its way to becoming the customer for at least six of the nine firms planning the Ethereum ETF launch. This has raised some concerns among experts, citing risks connected with centralization and a concentration of customer responsibilities. They argue that having one entity handle so much of the market creates a security concern.

Coinbase and SEC Agree on Confidentiality in Litigation

On a related note, Coinbase and the SEC recently made submissions suggest stipulation and protection orders over the production and confidentiality of some documents during the course of litigation. This agreement would protect sensitive information, including financial transactions and depositions, so that such details remain confidential throughout the legal process.

The appointment of Coinbase to be a major customer for a number of Ethereum ETFs, coupled with the confidentiality agreements in the course of litigation, speaks to the rising influence and complexity of regulatory and operational frameworks in the crypto space.