SEC Green Lights Plans To Expand BNY Mellon’s Custody Of Crypto Beyond ETFs
The Securities and Exchange Commission (SEC) of the United States has sanctioned the Bank of New York Mellon Corp (BNY) relations with respect to storage of crypto assets apart from the widely circulated Exchange Traded Funds.
Considering the nature of the announcement, this could overthrow Coinbase, who currently dominates the position of the main digital asset custodian for most of the spot Bitcoin ETFs distributed in the market.
BNY Is Given The Green Light By The SEC To Widen The Scope Of Its Cryptocurrency Trust.
With a crypto dominance of over $2 trillion, BNY Mellon has a defensive advantage over their competitors. It is notable that the existing business model which is employed to provide virtual currency custody services currently contains spot bitcoin and ethereum etfs. The institution recently also approached the SEC’s Office of the Chief Accountant to find a compliant way of housing the vulnerable btc and eth customer assets with a reasonable assurance that such funds would be secure even in case of the bank closing down. In other words, it had sought to change a practice whereby the securities held on behalf of the depositors are treated as liabilities on the balance sheet. This move makes it very easy for the bank to implement custody service provision and compliance to supervision.
While addressing the states of BNY Mellon’s crypto custody apparatus, SEC Chair Gary Gensler suggested that this model could also be used for other types of digital assets.
Gensler stated that even though the present approval only mentions the Bitcoin and Ethereum ETFs, there is no limitation on the custody structure.
