Trends
BNY Approved by SEC for Crypto Custody Beyond ETFs
OUR TAKEThe SEC has approved Bank of New York Mellon (BNY) to offer digital asset custody services for bitcoin and ether, using a new structure designed to protect client assets in the event of insolvency. This development could pave the way for BNY to expand into broader digital asset custody beyon…
Headline
OUR TAKEThe SEC has approved Bank of New York Mellon (BNY) to offer digital asset custody services for bitcoin and ether, using a new structure designed to protect client assets in the event of insolvency. This development could pave the way for BNY to expand into broader…
Context
OUR TAKE The SEC has approved Bank of New York Mellon (BNY) to offer digital asset custody services for bitcoin and ether, using a new structure designed to protect client assets in the event of insolvency. This development could pave the way for BNY to expand into broader digital asset custody beyond ETFs. While this marks a significant milestone in the institutional adoption of crypto assets, questions remain about the regulatory and financial implications, particularly regarding the use of individual wallets and the future of crypto custody services in the banking industry. –Heidi Luo, BTW reporter The US Securities and Exchange Commission (SEC) granted Bank of New York Mellon (BNY) permission to offer custody services for bitcoin and ether through a new structure designed to protect client assets.
Evidence
Pending intelligence enrichment.
Analysis
This structure was reviewed and received a “non-objection” from the SEC, meaning that it meets the agency’s accounting requirements under Staff Accounting Bulletin 121 (SAB 121). This approval allows BNY to safely custody crypto assets without having to record the digital assets on its balance sheet, thereby alleviating regulatory concerns for the bank. The new custody structure involves the use of individual crypto wallets, each of which is linked to a separate bank account. These wallets are segregated from the bank’s own assets, ensuring that client funds are protected in the event of a bankruptcy. BNY’s structure was specifically approved for bitcoin and ether ETFs, but SEC Chairman Gary Gensler emphasised that the structure could be applied to other digital assets. However, BNY will have to decide whether to extend this service to other crypto assets. Also read: US lawmakers challenge SEC on crypto regulation Also read: Coinbase challenges US SEC over crypto regulation clarit Coinbase challenges US SEC over crypto regulation clarity
Key Points
- BNY Mellon receives SEC approval for a new custody structure to secure bitcoin and ether, with the potential to expand to broader crypto assets.
- The new structure ensures that client assets are protected even in the event of a bank insolvency, potentially reshaping the digital asset custody landscape.
Actions
Pending intelligence enrichment.
