Coinbase Poised to Become Custodian for WisdomTree's Bitcoin ETF, Paving the Way for SEC Approval

In a recent amendment to its S-1 filing, asset manager WisdomTree has designated Coinbase Custody Trust Company LLC as the official custodian for its spot Bitcoin ETF. This marks a departure from the original filing, which named U.S. Bank, National Association as the custodian.

WisdomTree joins a growing list of ETF sponsors, including Fidelity, VanECK, Ark Invest/21Shares, Valkyrie, and Galaxy/Invesco, in selecting Coinbase as their custodian. This widespread adoption of Coinbase's custody services underscores the company's reputation as a trusted and reliable custodian in the cryptocurrency industry.

As custodian, Coinbase will bear the responsibility of safekeeping all Bitcoin owned by the WisdomTree Bitcoin Trust. This includes safeguarding any Bitcoin sent to WisdomTree's trust by authorized firms in exchange for shares. Additionally, Coinbase will handle the sale of Bitcoin at the sponsor's request for the purposes of paying sponsor fees or other Trust expenses and liabilities.

Coinbase's commitment to security is evident in its practice of storing a substantial portion of the Trust's Bitcoin private keys in cold storage or similarly secure technology. This robust security infrastructure further reinforces Coinbase's position as a preferred custodian in the cryptocurrency space.

The selection of Coinbase as custodian is a significant step forward in WisdomTree's journey to obtain SEC approval for its Bitcoin ETF. The agency's next deadline to approve or deny the WisdomTree Bitcoin Trust is January 15, 2023. With the SEC having previously acknowledged that Bitcoin does not qualify as a security and the agency's recent loss in its lawsuit against Grayscale, the outlook for ETF approval appears promising.

Key Takeaways:

  • Coinbase Custody Trust Company LLC has been named as the official custodian for WisdomTree's spot Bitcoin ETF.
  • This marks a change from the original filing, which named U.S. Bank, National Association as the custodian.
  • The selection of Coinbase underscores the company's reputation as a trusted and reliable custodian in the cryptocurrency industry.
  • Coinbase will be responsible for safekeeping all Bitcoin owned by the WisdomTree Bitcoin Trust, including any Bitcoin sent to WisdomTree's trust by authorized firms in exchange for shares.
  • Coinbase will also handle the sale of Bitcoin at the sponsor's request for the purposes of paying sponsor fees or other Trust expenses and liabilities.
  • Coinbase stores a substantial portion of the Trust's Bitcoin private keys in cold storage or similarly secure technology.
  • The SEC's next deadline to approve or deny the WisdomTree Bitcoin Trust is January 15, 2023.
  • The outlook for ETF approval appears promising, given the SEC's prior acknowledgement that Bitcoin does not qualify as a security and the agency's recent loss in its lawsuit against Grayscale.
Author: Denis Tabyrtsa

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