The game of musical chairs preceding the decision on whether a spot Bitcoin (BTC) exchange-traded fund (ETF) will be allowed on Wall Street is ongoing, with Coinbase reportedly replacing the leadership of its custody business. According to Bloomberg, Aaron Schnarch recently resigned as the CEO of Coinbase Custody.
Schnarch had been leading the company since June 2022 but has now been succeeded by Rick Schonberg, a senior fintech executive working at Coinbase since 2021 as head of custody, foundations and trading, according to his LinkedIn profile. Goldman Sachs, State Street and JPMorgan Chase are among his previous employers.
“We have extensively prepared for ETF approval,” a Coinbase spokesperson told Bloomberg, adding that the company’s systems “have been designed and tested to handle added trading volume, increased liquidity and general increases in demand on our systems.”
Coinbase Custody is a trust company, meaning it serves as a legal guardian of assets, ensuring they are managed and distributed according to the wishes of the owner or legal requirements. The company is under the oversight of the New York Department of Financial Services, and it’s audited by Deloitte & Touche.
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Coinbase Custody will safeguard digital tokens on behalf of many asset managers in the event that spot Bitcoin ETFs are approved by the United States Securities and Exchange Commission.
The news comes just a few days after Barry Silbert, founder of Digital Currency Group, resigned from Grayscale’s board of directors. Silbert’s departure could increase Grayscale’s chances of successfully converting its Grayscale Bitcoin Trust into a spot Bitcoin ETF, according to some crypto market commentators.
The SEC has previously denied several applications, but the applicants’ weight and a recent court ruling may lead to a different result this time. Companies in line for regulatory approval include financial giants such as BlackRock, Franklin Templeton and Grayscale Investments — all of which plan to use Coinbase Custody to store Bitcoin.
Bloomberg ETF analyst Eric Balchunas expects a positive decision on Jan. 9 and trading to begin around Jan. 11. The prospect is driving Bitcoin prices skyward, with the cryptocurrency gaining nearly 160% in 2023.
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