VanEck advisor Gabor Gurbacs has raised concerns about the majority of spot Ethereum ETF issuers in the U.S. choosing Coinbase as their custodian. Coinbase is the custodian for eight out of nine Ethereum ETFs, which raises the issue of fund concentration risks.
Historically, a similar concentration was noted with Bitcoin ETFs approved in January. Gurbacs praised Coinbase’s security but questioned the risk management of fund issuers relying on a single entity. VanEck opted for Gemini as its custodian, while Fidelity chose self-custody.
The use of a single custodian like Coinbase poses an unnecessary risk for investors, according to industry experts. This risk could be mitigated by requiring a multi-custodian setup. Such a setup would protect against unforeseen issues, enhancing investor safety.
This scenario emphasizes the need for diversified custodial arrangements to ensure long-term security and sustainability in the crypto ETF market.
