Originally published on: September 12, 2024
21Shares, a prominent asset manager, has recently appointed Anchorage Digital Bank and BitGo as custodians for its cutting-edge spot cryptocurrency exchange-traded funds (ETFs). This groundbreaking decision, unveiled on Sept. 12, marks a significant development in the world of digital asset management.
In an effort to optimize the risk management capabilities of their products, 21Shares has chosen to diversify its custodial partners. With Anchorage Digital Bank, BitGo, and the existing custodian Coinbase collectively overseeing 21Shares’ ARK 21Shares Bitcoin ETF (ARKB) and 21Shares Core Ethereum ETF (CETH), investors can rest assured that their assets are in safe hands.
Andres Valencia, the head of investment management at 21Shares, emphasized the importance of this diversification strategy, stating that it enhances the safety and security of their offerings. This move positions 21Shares as one of the pioneering US spot crypto ETF issuers to expand their custodial network beyond traditional boundaries.
In light of the evolving landscape of digital asset custodianship, it is crucial for market players to adhere to rigorous standards for secure storage. By obtaining a New York trust charter, companies like Fireblocks have gained the necessary regulatory approval to serve US clients. Notably, established institutions such as Coinbase Custody Trust and Fidelity Digital Asset Services have also made significant strides in this domain.
The adherence to strict guidelines for secure crypto storage, including the utilization of cold-storage wallets and multiparty computation (MPC) for transaction authorization, underscores the industry’s commitment to safeguarding investor funds. Additionally, reputable custodians typically offer insurance coverage against exploit risk, providing clients with an added layer of protection.
In light of the recent regulatory scrutiny faced by investment managers, ensuring compliance with the custody rule is paramount. The SEC’s crackdown on fund advisers who neglect to adequately protect client assets serves as a cautionary tale for those operating in the cryptocurrency space. By partnering with federally chartered banks like Anchorage Digital Bank, fund issuers can now navigate the regulatory landscape with greater ease and confidence.
As the demand for regulated exposure to digital assets continues to rise, the collaboration between Anchorage Digital Bank, BitGo, and Coinbase sets a new standard for custodial excellence. With a focus on security, transparency, and regulatory compliance, 21Shares is poised to lead the charge in the evolving world of digital asset management.
