Coinbase Custody: A Single Point of Failure for Crypto ETFs?

SEC’s SAB 121 may centralize crypto custody, raising risks of single-point failures.
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The SEC’s position on crypto custody, as highlighted by SAB 121, may inadvertently be concentrating risks within the cryptocurrency market. Fox Business journalist Eleanor Terrett points out that by discouraging federally regulated banks from holding crypto assets, the SEC is effectively limiting the pool of potential custodians.

This is case in point for why SAB 121 should be repealed. The @SECGov is discouraging federally regulated banks from custodying crypto, narrowing the custodian pool, thus making them more centralized and potentially vulnerable.
The government should WANT a federally regulated… https://t.co/8EULtwXK4q
— Eleanor Terrett (@EleanorTerrett) September 4, 2024

Terrett further emphasizes that this centralization could increase the crypto ecosystem’s vulnerability to attacks, particularly since nearl…

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Source: https://coinedition.com/coinbase-custody-a-single-point-of-failure-for-crypto-etfs/