Anchorage Digital to Offer Crypto Custody Services For ARK 21Shares
The bank will handle crypto custody for one of the leading issuers of crypto exchange-traded funds, ARK 21Shares.
Anchorage Digital, the only US government-regulated crypto bank, has assumed crypto custody for ARK 21Shares Bitcoin (BTC) exchange-traded funds (ETFs). Ranked as the third largest in terms of inflows, 21Shares’ ARKB trails behind only BlackRock and Fidelity’s offerings, according to data from Farside Investors.
Anchorage Digital Bank’s Custody of ARK 21Shares Bitcoin ETF
These ETFs have been made available to investors as a new avenue for interacting with Bitcoin thanks to the alliance between 21Shares and ARK Invest, a firm that Cathie Wood heads. Anchorage operates under a federal charter, offering broader regulatory coverage than other businesses constrained by state regulations.
Hence, the crypto bank is a qualified custodian and will oversee the safekeeping of the assets underlying these ETFs. This service provides a greater degree of asset security, which is essential for overseeing exchange-traded products (ETPs) backed by cryptocurrencies.
The bank’s federal charter guarantees that it complies with strict regulatory standards and expands its access to cryptocurrency markets.
Importance of Crypto Custody for ETFs
Crypto custody is essential to the functioning of cryptocurrency exchange-traded funds (ETFs). The purpose of cryptocurrency exchange-traded funds (ETFs) is to offer investors a regulated investment vehicle that encapsulates virtual currency such as Ethereum and Bitcoin.
Through these ETFs, these assets—which were previously difficult to trade—have become more accessible, opening up the cryptocurrency market to a wider range of investors. Keeping these assets under custody is a big job, especially for companies that are handling billions of dollars worth of assets.
Anchorage Digital Bank has become a leader in this area as it provides a safe platform that complies with the strictest asset protection guidelines. Furthermore, the Office of the Comptroller of the Currency (OCC) oversees its custodial services, which protect assets from the risks of bankruptcy and other financial failures through segregation.
Furthermore, the assets are safeguarded by the bank’s cutting-edge security features, which include offline private key storage and biometric authentication.
SEC’s Proposed Crypto Custody Regulation
Regulatory oversight on crypto custody has grown in importance as the cryptocurrency market expands. A proposed rule by the US Securities and Exchange Commission (SEC) mandates that registered investment advisers use “qualified custodians” to store their client’s assets.
Driven by SEC Chair Gary Gensler, this proposal seeks to guarantee that the legal management of cryptocurrency assets is limited to a few firms. Suppose this restricted definition of qualified custodians is implemented. In that case, only a small number of industry participants, like the bank-in-residence Anchorage Digital and registered broker-dealers Prometheum Inc. and tZero Group Inc. will qualify.
However, the implementation of such a regulation would alter the crypto custody landscape. While other businesses might find it difficult to meet the strict requirements set forth by the SEC, companies like Anchorage Digital could benefit from it and maintain their position as industry leaders.
These rules are part of a larger initiative to safeguard investors by making sure their assets are kept in controlled, safe environments. More importantly, the way these regulations are put into practice and upheld will determine how crypto custody develops in the future, as this is still up for debate.
Standard Chartered Launches Digital Asset Custody Service in UAE
In a related development, Standard Chartered has made a big advancement in the bank’s digital asset strategy by launching its eagerly awaited digital asset custody service in the United Arab Emirates (UAE). This new offering is licensed by the Dubai Financial Services Authority (DFSA).
With its initial support for Bitcoin and Ethereum, the bank’s service enables customers to protect their digital assets in a controlled and secure setting. Moreover, the bank’s first client for this service, Brevan Howard Digital, represents a growing institutional interest in digital assets.
The collaboration between Standard Chartered and Brevan Howard Digital shows how much demand there is for safe, controlled crypto custody options. CEO Bill Winters remarked that the bank is able to close the gap between traditional finance and the rapidly developing world of digital assets because of its strong infrastructure and proficiency in traditional financial services.
Brevan Howard Digital CEO Gautam Sharma also added that the launch is a major victory for the United Arab Emirates and the larger digital asset sector.
