Crypto ETF issuer 21Shares diversifies its custodian roster
The investment firm onboards Anchorage Digital Bank and BitGo as partners alongside current custodian Coinbase
21Shares modified by Blockworks
21Shares is adding two partners to safeguard assets for its US bitcoin and ether ETFs.
The crypto ETP issuer has tapped federally chartered Anchorage Digital Bank and digital asset security-focused BitGo to be custodians for the Ark 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH).
These two companies will join Coinbase, a crypto exchange that acts as a custodian for a majority of the US-listed spot BTC and ETH funds.
“We consider our custody partners to be crucial to the risk management and operational excellence of our product lineup, and diversification adds to the safety and security of our offering,” 21Shares investment management head Andres Valencia said in a statement.
Read more: 21Shares exec talks US crypto ETF adoption, where we go from here
As the only digital asset bank with a charter from the Office of the Comptroller of the Currency, Anchorage offers “federally regulated and bankruptcy-remote custody” for crypto-native and traditional asset managers, Anchorage Digital CEO Nathan McCauley told Blockworks.
Anchorage meets the Securities and Exchange Commission’s definition of a “qualified custodian,” McCauley has said — a term included in the regulator’s February 2023 proposal that would “entrust safekeeping of client assets” to such entities.
“Our technical differentiators — including offline key storage, low-latency architecture and efficient share creation and redemption — are a major unlock for ETF providers,” he added.
BitGo CEO Mike Belshe lauded 21Shares’ multi-custodial approach in a statement, adding that his company offers “100% cold storage.”
ARKB, which launched in January, has about $2.5 billion assets under management. Hitting the market more recently in July, CETH manages $9 million in assets.
The decision to add more custodians for the funds comes after the FBI said in a statement last week that “malicious cyber actors” from North Korea conducted research on targets connected to cryptocurrency ETFs in recent months.
Such actors pose “a persistent threat to organizations with access to large quantities of cryptocurrency-related assets or products,” the agency added.
While most issuers of the spot bitcoin and ether ETFs use Coinbase as a custodian, Fidelity self-custodies and VanEck uses Gemini.
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