Coinbase has announced the arrival of a new CEO for its Coinbase Custody platform. Aaron Schnarch has vacated his position as the CEO of Coinbase custody; Rick Schonberg will take over his position.
The announcement of this leadership change has come at an exciting time, especially since firms like BlackRock, Grayscale Investments, and Franklin Templeton have already shared with Coinbase custody that it will provide custodial services to them if their spot Bitcoin ETF applications get approved from the SEC.
According to Bloomberg, Aaron Schnarch has been leading the custody solutions wing of Coinbase since 2022. His replacement, Rick Schonberg, boasts an impressive CV as he has worked for several of the giants in financial institutions, with names like Goldman Sachs, JP Morgan Chase, and State Street popping out as the places where he has previously worked.
Coinbase Custody is a specialized service provided by Coinbase, a leading cryptocurrency exchange offering secure institutional-grade storage solutions for various digital assets.
Tailored for institutional investors, including hedge funds and family offices, Coinbase Custody prioritizes the safekeeping of digital assets through features such as encryption, offline cold storage, and multi-signature wallets.
The service extends insurance coverage to protect against risks like theft and hacking and may also offer staking services for specific cryptocurrencies.
Coinbase Custody aligns with regulatory standards, providing a secure and compliant option for institutional clients seeking to store and manage their digital assets.
Speaking to a journalist of the news media outlet, Bloomberg, a Coinbase spokesperson said that the firm has extensively prepared for the approval of a spot Bitcoin ETF and they have designed and tested the firm’s system to handle the increased trading volume when the ETF applications are approved by the SEC. The test also includes managing increased liquidity and general increases in demand on the Coinbase system.
Coinbase Custody is set to secure digital tokens for numerous asset managers if spot Bitcoin ETFs receive approval from the SEC.
The latest development comes a few days after surprising news was given to the crypto public. It was revealed that Barry Silbert, the founder of DCG, resigned from his position as a board of directors from Grayscale’s Investment.
Many analysts believed that Sillbert’s departure might give the Grayscale application a green light from the SEC as he was part of the ongoing investigation conducted by the SEC related to Digital Currency Group (DCG) for internal financial transfers, particularly between DCG and its troubled subsidiary Genesis.
The probe focuses on disclosures and details surrounding these transfers, which occurred as Genesis faced significant losses due to a collapsed hedge fund. The investigation could have significant consequences for DCG; therefore, Sillbert’s involvement with Grayscale couldn’t have helped their chances of getting their Bitcoin ETF application approved by the SEC.
The SEC had shown great reluctance in the past to approve these ETF applications but, in recent times, has shown some semblance of leniency and understanding. The leniency can be attributed to the willingness of the financial institutions to open a dialogue with the SEC and reach an understanding of what it requires from these funds to do in terms of following protocol.
Their willingness to listen to the suggestions from the SEC has increased their chances of receiving the green light for their application approval.
Also, a previous court ruling from in the past has made the SEC see that they cannot keep on denying these applications and, therefore, have to work with these firms to find an amicable solution where the regulatory authority approves these applications once all the legal requirements are fulfilled in the eyes of SEC.
Bloomberg ETF analyst Eric Balchunas anticipates a favorable decision on January 9, with trading expected to commence around January 11, driving Bitcoin prices significantly higher.
