Coinbase Named Custodian by Six ETH Spot ETF Applicants, Raising Centralization Concerns

IconCryptoNewsTerminal Staff30 May, 2024

cryptonews.jpg

Coinbase Named Custodian by Six ETH Spot ETF Applicants, Raising Centralization Concerns

Six applicants for ETH spot ETFs, including Grayscale, have chosen Coinbase as their custodian, according to Decrypt. This move has sparked concerns among experts about the potential security risks associated with centralization. "Coinbase is already the second-largest Ethereum validator," said one expert. "This could create a security risk due to centralization." Centralization can make a blockchain network more vulnerable to attack, as a majority of the network's nodes are controlled by a single entity. In the case of Coinbase, this could mean that the company could potentially manipulate the Ethereum network or freeze users' funds. It is important to note that these are just concerns at this point, and there is no evidence to suggest that Coinbase has any malicious intent. However, it is something that investors should be aware of before investing in any ETH spot ETFs that use Coinbase as their custodian.

Related News