Anchorage Digital and 21Shares Forms Custody Partnership

Anchorage Digital, the only U.S. federally chartered crypto bank, announced earlier today that it will provide custody services for 21Shares’ new Exchange-Traded Funds (ETFs). The digital investment products are the ARK 21Shares Bitcoin ETF (ARKB) and the 21Shares Core Ethereum ETF (CETH).

In a press statement, Anchorage Digital CEO Nathan McCauley shared that the federal charter overrides state-by-state regulations, allowing the firm to operate nationally. He lauded this potential as making the firm a qualified custodian, providing a higher level of trust and security for managing ETF assets across different states. 

Anchorage Digital Unveil Benefits for Crypto EFTS

In the statement, McCauley highlighted that Anchorage Digital, Apollo Global’s crypto custodian, is stepping up its security game. The crypto bank will make biometric authentication mandatory for crypto ETF issuers and participants. He noted that this move is geared toward minimizing the chances of human error.

In addition, the crypto bank is rolling out technological upgrades, such as storing private keys offline and employing a speedy architecture. McCauley added that streamlining the creation and redemption of ETF shares is included. 

The crypto bank emphasized that its custody services are designed to separate and protect customers’ assets. Moreover, the bank must ensure that client funds are distinct from the company’s funds in compliance with regulations. This segregation helps maintain the integrity and security of the assets entrusted to the bank.

Anchorage Digital’s Remarkable Strides 

Since its establishment in 2017, the crypto bank has significantly contributed to connecting traditional finance with the digital asset ecosystem. 

In 2022, the digital financial institution, through a strategic partnership, expanded its operations to Asian markets. Two years later, Forbes reported that the crypto bank now manages assets worth over $50 billion. In August, the crypto bank partnered with PayPal to launch a reward program for PYUSD stablecoins holders. 

Notably, custody has become a challenging issue in the crypto industry due to stringent rules proposed by the U.S. Securities and Exchange Commission (SEC). 

Crypto ETFs Simplify Access to Digital Assets Investments

The creation of crypto ETFs aimed to provide a broader range of investors with simpler access to regulated products based on cryptocurrencies, which were previously challenging to trade. In January, the leading digital asset, Bitcoin ETFs, was approved, which paved the way for Ethereum (ETH) ETFs to launch later in May. Introducing these digital investment products has opened doors for more traditional investors and several countries to participate in the crypto market. 

It also spearheaded the accessibility and diversity of investment options in the cryptocurrency sector. Market watchers and participants hope that the US SEC will approve the Solana and XRP ETFs, just like Brazil.