30 December 2023
According to Bloomberg, Coinbase Global has recently experienced a change in leadership within its custody division. The departure of Aaron Schnarch, former CEO of Coinbase Custody, has been confirmed by a spokesperson, who also revealed that Schnarch was replaced by Rick Schonberg in August.
Per the report, the transition aligns with Coinbase’s efforts to offer services to applicants of spot Bitcoin (BTC) exchange-traded funds (ETFs).
Coinbase Affirms Readiness For Bitcoin ETF Approval
Rick Schonberg, who joined Coinbase in 2021, aims to provide experience to his new role, having previously worked at reputable financial institutions such as Goldman Sachs, State Street, and Tagomi, according to Bloomberg.
Coinbase on the other hand, has emerged as the preferred choice for custodial services among Bitcoin ETF applicants, including industry giants like BlackRock, Franklin Templeton, and Grayscale Investments.
Custody services play a crucial role for potential managers of spot Bitcoin ETFs, as investors rely on these providers to securely safeguard their digital tokens.
Notably, a Coinbase spokesperson emphasized the company’s preparedness for ETF approval, stating to Bloomberg:
We have extensively prepared for ETF approval. Our systems have been designed and tested to handle added trading volume, increased liquidity, and general increases in demand on our systems.
Coinbase Custody, operating as a trust company, falls under the regulatory oversight of the New York Department of Financial Services and undergoes auditing by Deloitte & Touche.
Countdown To Historic Decision
The race to obtain regulatory approval for the first ETF directly investing in the largest cryptocurrency, Bitcoin, is entering a critical phase.
The US Securities and Exchange Commission (SEC) faces a deadline of January 10 to decide whether to approve a spot Bitcoin ETF application submitted by ARK Investment Management, led by Cathie Wood, and 21Shares, along with potentially other similar filings.
Overall, the departure of Aaron Schnarch and the subsequent appointment of Rick Schonberg within Coinbase Custody highlight the company’s strategy to the growing demand for custodial services from Bitcoin ETF applicants.
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.
Bitcoin, the largest cryptocurrency in the market, is currently trading at $42,100, representing a 1.1% decline over the past 24 hours.
In recent weeks, BTC’s price has been consolidating above $40,000, exhibiting sideways movement since the beginning of December. However, it has achieved a notable gain of over 11% in the last 30 days.
It remains to be seen how the price of BTC will react to the potential approval of these index funds by the largest asset managers in the world, and what other impact it will have on the overall crypto market.
Featured image from Shutterstock, chart from TradingView.com