On Friday, Grayscale Investments and Coinbase Custody (Coinbase Managed Services) announced a partnership to securely host grayscale digital assets.
Coinbase CEO Brian Armstrong said that its custody department currently has $1 billion in assets, which will become a managed supplier of grayscale single assets and diversified investment products.
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According to the most recent quarterly report of grayscale, the company managed total assets of $2.7 billion, more than double the number in the first quarter, when the asset holdings were $1.2 billion.
Grayscale holds Bitcoin, Bitcoin Cash (BCH), Ethereum, Ethereum Classic (ETC), Litecoin, Stellar, XRP and Zcash. Coinbase Custody also plans to hold grayscale horizen (ZEN) tokens and is still awaiting regulatory approval.
Most of the assets are being transferred from the existing grayscale security provider Xapo to Coinbase Custody. Currently, the grayscale ZEN private key is held by Digital Asset Custody Company, which was acquired by Bitcoin futures platform Bakkt earlier this year.
It is reported that Coinbase Custody has been hosting Grayscale's assets since July 29. The custodian is regulated by the New York Financial Services Agency (NYDFS) and is within the jurisdiction of New York Banking Law.
Coinbase Custody CEO Sam McIngvale said in a statement that the business "has the same custodial standards as the National Bank. We also offer the widest coverage of the cryptocurrency industry."
“Grayscale and Coinbase are leading the way in providing secure, reliable, trusted and regulated digital asset usage. Grayscale is a veteran, trusted and valuable partner between customers and service providers.”
According to the agreement between the two parties, Coinbase Custody will initially hold grayscale assets for three years and charge fees based on the assets under custody. Both companies have a three-year disclaimer. Once the initial period is over, the parties can terminate the partnership by 90 days notice.