Coinbase Custody Head Departs As Crypto Giant Prepares For Bitcoin ETF Services

4:17 am
December 30, 2023
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**Coinbase Custody Head Departs as Crypto Giant Gets Ready for Bitcoin ETF Services**

Summary:
Coinbase’s custody division experienced leadership change as Aaron Schnarch, former CEO, leaves as Rick Schonberg takes over. This change aligns with the company’s efforts to provide services for potential Bitcoin ETF applicants. Coinbase has emerged as a preferred custodial choice among Bitcoin ETF applicants. With a potential Bitcoin ETF approval looming, the industry anticipates the SEC’s decision. The departure and new appointment within Coinbase Custody underscore the company’s response to the increasing demand for custodial services.

Recently, Aaron Schnarch, the former CEO of Coinbase Custody, departed as Coinbase experienced a change in leadership within its custody division, according to a report by Bloomberg. Subsequently, Rick Schonberg replaced Schnarch in August, coinciding with Coinbase’s efforts to offer services to potential spot Bitcoin exchange-traded fund (ETF) applicants. As revealed by a spokesperson, Coinbase has emerged as the top choice for custodial services among notable Bitcoin ETF applicants like BlackRock, Franklin Templeton, and Grayscale Investments.

The company’s readiness for ETF approval was emphasized by a Coinbase spokesperson, stating that their systems have been designed and tested to handle increased trading volume and liquidity. Coinbase Custody, regulated by the New York Department of Financial Services and audited by Deloitte & Touche, plays a vital role for potential managers of spot Bitcoin ETFs.

The race for regulatory approval for the first ETF directly investing in Bitcoin continues, with the US Securities and Exchange Commission (SEC) facing a January 10 deadline to decide whether to approve a spot Bitcoin ETF application submitted by ARK Investment Management, led by Cathie Wood, and 21Shares, among others. With the potential approval of spot Bitcoin ETFs on the horizon, the industry eagerly awaits the SEC’s decision, which will have far-reaching implications for the adoption and mainstream acceptance of cryptocurrencies.

In recent weeks, Bitcoin’s price has consolidated above $40,000 and has witnessed a notable gain of over 11% in the last 30 days. The potential approval of index funds by major asset managers and its impact on the overall crypto market remain to be seen.

**FAQs**

1. **What is Coinbase Custody?**
Coinbase Custody is a subsidiary of Coinbase Global that provides secure and compliant storage solutions for institutional investors and a broad range of digital assets, including cryptocurrencies.

2. **What is a Bitcoin ETF?**
A Bitcoin exchange-traded fund (ETF) is a type of security that tracks the price of Bitcoin and can be traded on traditional stock exchanges. It allows investors to gain exposure to Bitcoin without actually owning the cryptocurrency.

3. **How does the departure of Aaron Schnarch affect Coinbase’s strategy?**
The departure of Aaron Schnarch and the subsequent appointment of Rick Schonberg within Coinbase Custody highlight the company’s strategic response to the growing demand for custodial services from potential Bitcoin ETF applicants.


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