Cryptocurrency asset manager Grayscale Investments will partner with Coinbase Custody to serve as Custodian for the underlying assets for each of its products.
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“Grayscale and Coinbase have led the way in providing safe, secure, trustworthy, and regulated access to digital assets. Grayscale is an established, trusted, and valuable partner to its clients and its service providers should be the same,” said Sam McIngvale, Coinbase Custody Chief Executive Officer.
“As a NY State-chartered trust company, Coinbase Custody is held to the same fiduciary standards as national banks. We also offer some of the broadest and deepest insurance coverage in the crypto industry.”
Coinbase Custody will serve as custodian for Grayscale’s single-asset investment products and their underlying assets in Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Horizen (ZEN),* Litecoin (LTC), Stellar Lumens (XLM), XRP, and Zcash (ZEC), including the public quotations available to all individual and institutional investors: Grayscale Bitcoin Trust™ (OTCQX: GBTC), Grayscale Ethereum Trust™ (OTCQX: ETHE), and Grayscale Ethereum Classic Trust™ (OTCQX: ETCG).
Coinbase Custody will also serve as custodian for Grayscale’s diversified investment product, Grayscale Digital Large Cap Fund™, which provides exposure to the top digital currencies by market capitalization and is currently comprised of Bitcoin (BTC), Ethereum (ETH), XRP, Bitcoin Cash (BCH), and Litecoin (LTC).
Coinbase Custody is a regulated entity and an independent, NYDFS-regulated company that offers access to a secure, audited, and insured custody solution. As a qualified custodian, Coinbase Custody is a fiduciary under NY Banking Law and is licensed to custody its clients’ digital assets in trust on their behalf.
Each of the custodian agreements establishes the rights and responsibilities of Coinbase Custody, Grayscale, and each Grayscale investment product with respect to the safekeeping of each product’s digital assets. Each agreement is for an initial term of three years with a fee based on a percentage of assets under custody. During the initial term, either party may terminate for certain events described in the agreement, and after the initial term, either party may also terminate upon ninety days’ prior written notice.
The existing agreements that provide for the safekeeping of each Grayscale investment product’s digital assets will be terminated following the conversion of the custody role to Coinbase Custody.
Coinbase Custody does not yet support Horizen (ZEN). Pending regulatory approval, the underlying assets for Grayscale Horizen Trust will be transferred as soon as is practicable. In the interim, the assets will remain with the existing security provider.