Digital asset investment firm, Valkyrie, has become the first spot Bitcoin Exchange-Traded Fund (ETF) to diversify the custody of its coins, according to a recent Securities and Exchange Commission (SEC) filing. In a move to enhance security and reliability, Valkyrie is now working with leading custodian provider BitGo, already in addition to Coinbase, to safeguard their funds.
The filing, dated February 1, 2024, is an attempt by Valkyrie to strengthen the security infrastructure of its spot Bitcoin ETF by engaging multiple custody providers. The collaboration with BitGo aims to optimize for the safety of their bitcoin by diversifying the funds that were all previously held with Coinbase.
"On January 17, 2024, Valkyrie Bitcoin Fund (the “Trust”) and BitGo Trust Company, Inc. (“BitGo”), a South Dakota trust company duly organized and chartered under the South Dakota Banking Law, entered into a Custodial Services Agreement," the filing stated. "Pursuant to the Agreement, BitGo will provide services related to custody and safekeeping of the Trust’s bitcoin holdings."
By diversifying custody providers, the firm not only bolsters the security of its ETF assets but also sets a precedent for other Bitcoin ETF issuers seeking to protect their customers funds.
"The Trust’s existing custody arrangement with Coinbase Trust Company, LLC (“Coinbase”) is unaffected by the entry into the Agreement," the filing continued. "The Sponsor anticipates utilizing the custodial services of both Coinbase and BitGo to custody the Trust’s bitcoin."
Valkyrie's decision to diversify their assets comes at a time of heightened focus on security measures within the Bitcoin industry. By working with Coinbase and BitGo, reputable entities known for their proven expertise in bitcoin custody, Valkyrie hopes to fortify the protection of its investors' assets.
"The Sponsor expects to utilize BitGo’s services to custody a portion of the Trust’s bitcoin beginning on or about the date of this report," the filing confirmed.
Source: Bitcoin Magazine - Bitcoin News, Articles and Expert Insights
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