TechFlow news, according to CoinDesk, aside from a few exceptions such as Fidelity and VanEck, most spot Bitcoin ETF (exchange-traded fund) issuers have chosen Coinbase as their custodian.
David Schwed, COO of Halborn, highlighted the potential security risks arising from this situation. While Coinbase has never suffered a known hack—explaining why many traditional institutions trust its expertise—no target is immune to hacking.
He expressed particular concern over the extreme concentration of assets held by a single custodian. Given that crypto assets possess cash-like characteristics, this concentration is inherently worrisome. He believes regulators may need to reconsider the current definition of a "qualified custodian," which in its present form might be insufficient to ensure adequate protection for blockchain-based risk assets.
Furthermore, he recommended that digital asset custodians should face greater oversight from better-trained regulators and adhere to stricter state and federal standards.
