(Bloomberg) -- Coinbase Global Inc.’s head of custody has departed the firm and been replaced as the crypto company gears up to provide services for spot Bitcoin exchange-traded fund applicants.
Aaron Schnarch, chief executive officer of Coinbase Custody, left in recent weeks, a spokesperson confirmed. He was replaced in August by Rick Schonberg, according to the spokesperson. Schonberg has been with Coinbase since 2021 and previously worked at Goldman Sachs, State Street and Tagomi, according to his LinkedIn profile.
Coinbase is the most-popular choice for custodian among Bitcoin ETF applicants, including BlackRock, Franklin Templeton and Grayscale Investments, according to a tally by Bloomberg Intelligence. Custody services will be a vital part of operations for potential spot-Bitcoin ETF managers as investors rely on the providers to safeguard the tokens.
“We have extensively prepared for ETF approval,” a Coinbase spokesperson said in a statement. “Our systems have been designed and tested to handle added trading volume, increased liquidity and general increases in demand on our systems.”
Set up as a trust company, Coinbase Custody is regulated by the New York Department of Financial Services and audited by Deloitte & Touche.
The race to get US regulatory approval for the first ETF to invest directly in the biggest cryptocurrency is reaching a critical point. The US Securities and Exchange Commission faces a Jan. 10 deadline to decide whether to approve a spot Bitcoin ETF application filed by Cathie Wood’s ARK Investment Management LLC and 21Shares, and potentially other similar filings.
Coinbase’s stock has benefited from this year’s rebound in the crypto market, surging almost 400% so far in 2023. The shares were down 6% at $175.29 as of 1:53 p.m. New York time.
(Adds timeline of Schonberg’s new role in 2nd paragraph and stock price in last paragraph.)
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