Ethereum

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VanEck advisor Gabor Gurbacs has flagged potential risks with the majority of spot Ethereum ETF issuers in the United States making Coinbase asset custodians. The reason is not far-fetched as it raises the issue involved with concentration of funds in a particular issuer. The Securities and Exchange Commission (SEC) approved spot Ethereum ETF listings driving up market sentiments.&nbsp; 
<h2 id="strong-vaneck-advisor-cites-custody-risk-strong">VanEck Advisor Cites Custody Risk&nbsp;</h2> 
Gabor Gurbacs highlighted potential risks with the vast majority of issuers choosing Coinbase as custodians for spot ETFs. In a series of posts on X (formerly Twitter), he noted that Coinbase holds assets for eight out of nine <a href="https://coingape.com/ethereum-foundation-selling-eth-ahead-spot-ether-etf-debut/" target="_blank" rel="noopener">Ethereum ETFs</a>. While he hailed the security team of Coinbase, the VanEck advisor pointed to a situation if something goes wrong.&nbsp; 
<blockquote>
 “Coinbase holds assets for 10 out of 11 spot Bitcoin ETFs and 8 out of 9 ETH ETFs. While I am sure they have a great security team, I fundamentally question the competency and judgment of boards and risk management committees at fund issuers who think this is an acceptable risk.”
</blockquote> 
He added even traditional assets are not remotely safe because most boards are incompetent. Clearing the air, he noted that he likes Coinbase and appreciates the work done but a single entity counterparty is an unacceptable risk. While the majority of funds chose Coinbase, VanEck went with Gemini as its custodian. On the other hand, Fidelity will offer self-custody of its assets.&nbsp; 
Also Read: <a href="https://coingape.com/swiss-banks-replacing-us-banks-for-crypto-payments-after-ftx-collapse/" target="_blank" rel="noopener">Swiss Banks Replacing US Banks For Crypto Payments After FTX Collapse</a> 
<h2 id="strong-ethereum-etfs-toe-line-as-bitcoin-efts-strong">Ethereum ETFs Toe Line as Bitcoin EFTs</h2> 
As the market finally sees approval of spot Ethereum ETFs in the United States, users draw similar lines with <a href="https://coingape.com/markets/ethereum-price-set-to-outperform-bitcoin-as-sec-approves-eth-etf-trading/" target="_blank" rel="noopener">Bitcoin ETFs</a>. This is because a majority of issuers also used Coinbase as their custodians which also raised similar concerns. A cross-section of users believe that most issuers wanted to proceed with a working template.&nbsp; 
Dave Abner, a principal at Dabner Capital Partners stated this issue of unnecessary risk for investors. “There is concentration risk because of so many firms using Coinbase as a crypto custodian. Even if that turns out not to be a problem for the SEC, to me it seems like an unnecessary risk for investors and I’m surprised that a multi-custodian setup isn’t required of issuers, just to protect against unforeseen problems.” 
Also Read: <a href="https://coingape.com/blackrock-ethereum-etf-goes-live-for-trading-what-to-expect-on-day-1/" target="_blank" rel="noopener">BlackRock Ethereum ETF Goes Live for Trading, What to Expect From Day 1?</a> 
The post <a href="https://coingape.com/vaneck-advisor-flags-risk-of-coinbase-as-majority-ethereum-etf-custodian/">VanEck Advisor Flags Risk of Coinbase As Majority Ethereum ETF Custodian</a> appeared first on <a href="https://coingape.com">CoinGape</a>.

VanEck Advisor Flags Risk of Coinbase As Majority Ethereum ETF Custodian

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