A majority of bitcoin ETF issuers have chosen Coinbase as a custodian, which is a concentration of risk A majority of bitcoin ETF issuers have chosen Coinbase as a custodian, which is a concentration of risk along with the inherently high-risk nature of crypto custodianship. Even if that is the safest option, new cybersecurity standards are needed for making crypto custody truly safe. Coinbase has never been hit by a known hack, however, there is no such thing as an unhackable target – anything and anyone can be compromised, given enough time and resources. Given the cash-like nature of crypto assets, that makes the situation inherently concerning. Most qualified custodians today secure equities, bonds or digitally tracked fiat balances, all of which are fundamentally legal agreements, which can’t simply be “stolen.” But bitcoin, like cash and gold, is what’s known as a bearer instrument. So for a crypto custodian, one mistake is all it takes for the assets to disappear entirely.

January 12, 2024 //  by Finnovate