Digital asset investment firm Valkyrie has become the first bitcoin spot exchange-traded fund (ETF) to diversify its coin custody, 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, as well as Coinbase, to protect 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 custodial providers. The collaboration with BitGo aims to improve the security of their bitcoins by diversifying funds previously held by Coinbase.
“On January 17, 2024, the Valkyrie Bitcoin Trust (“Trust”) and BitGo Trust Company, Inc. (“BitGo”), a South Dakota trust duly organized and chartered under the South Dakota Banking Act, entered into a Custodial Services Agreement The agreement,” the recording stated. “Under the agreement, BitGo will provide services related to the custody and safe custody of the Fund’s Bitcoin holdings.”
By diversifying its custody providers, the company is not only enhancing the security of its ETF assets, but is also setting a precedent for other Bitcoin ETF issuers seeking to protect their clients' funds.
“The Trust’s existing custody arrangements with Coinbase Trust Company, LLC (“Coinbase”) are not affected by the conclusion of the Agreement,” the filing continued. “The Sponsor expects to utilize the custodial services of both Coinbase and BitGo to hold the Fund’s Bitcoin.”
Valkyrie's decision to diversify its assets comes at a time of increased 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 enhance investor asset protection.
“The Sponsor expects to use BitGo’s services to hold a portion of the Fund’s Bitcoin beginning on or about the date of this report,” the filing asserted.
