Digital assets have become an increasingly mainstream component of American finance. Market capitalization of the crypto asset class globally now exceeds $2 trillion.1 Institutional and retail investors are increasingly looking to digital asset ETFs as their primary vehicle to invest in crypto assets. There is currently over $184 billion in digital asset ETF market capitalization and the growth of the segment over the past three years has been rapid.2 This growth is expected to continue as ETF issuers create new offerings that are tailored to retail and institutional investors' risk and return goals.

Without proper safeguards, holding digital assets exposes ETF sponsors to risk of theft and fraud. Incidents of stolen digital assets are widely documented, and issuers are at greater risk if they do not work with the right custody partner to protect their shareholders’ digital property.

ICE is reducing this risk by developing a digital asset custody offering through ICE Digital Trust (IDT), a New York state-chartered trust company and qualified custodian.3 IDT’s digital asset custody offering is tailored to reduce the risk of theft, fraud and is designed with enhanced technology, processes and governance to support custody of ETF-owned digital assets.

In ICE’s latest white paper, Protecting digital assets owned by exchange-traded funds with ICE Digital Trust, custody and cybersecurity experts at IDT explore many of the practical considerations and challenges facing ETF sponsors seeking to protect investor holdings of digital assets: