With Coinbase holding custody of 8 out of the 11 spot Bitcoin exchange-traded funds (ETFs), the company finds itself at the center of a growing controversy. This high level of concentration under a single custodian could lead to trouble, warned David Schwed, CEO of blockchain cybersecurity company Halborn, in a recent interview with Bloomberg.

“By design, our financial-market infrastructure is segregated into different roles,” stated Schwed. “When you have one entity that’s responsible for the entire life-cycle of the trade, I think that causes concerns.”

As a custodian, Coinbase is responsible for holding and securing the Bitcoin that these ETFs invest in. In return, it benefits from custodian fees and related services.

Schwed noted in a separate post that a huge inflow into Coinbase’s digital vault makes it an attractive target for cybercriminals. He raised concerns about the preparedness of crypto custodians like Coinbase, which may lack the extensive resources and layered supervision models employed by major banks to counter such threats.

Sharing a similar view as

Go to Source to See Full Article
Author: Vivian Nguyen

Did you like this?
Tip BTC Newswire with Cryptocurrency

• Bitcoin
• Bitcoin Cash
• Ethereum
• Litecoin
• Monero
• ZCash

Donate Bitcoin to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some bitcoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Bitcoin Cash to BTC Newswire

Scan the QR code or copy the address below into your wallet to send bitcoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Ethereum to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Ether:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Litecoin to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Litecoin:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate Monero to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some Monero:

Donate via Installed Wallet Copy

[X] Click Here to Hide Donation Details

Donate ZCash to BTC Newswire

Scan the QR code or copy the address below into your wallet to send some ZCash:

Copy ZCash Address

[X] Click Here to Hide Donation Details