BNY Mellon Moves to Offer Cryptocurrency ETF Custody

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BNY Mellon Moves to Offer Cryptocurrency ETF Custody
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BNY Mellon, the oldest bank in the United States, is moving closer to offering custody services to clients of cryptocurrency exchange-traded funds (ETFs). According to a report published by Bloomberg, the bank moved in this direction after an analysis that allowed the company to avoid treating these assets as liabilities on its balance sheet.

According to the report, the Office of the Chief Accountant of the U.S. Securities and Exchange Commission (SEC) conducted the review and raised no objections to BNY Mellon’s determination that custody of crypto assets for regulated ETF clients should not be recorded on the bank’s balance sheet.

This filing appears to indicate that the SEC has granted BNY Mellon an exemption from SAB 121, a rule that regulates the accounting of certain digital assets, paving the way for the bank to offer its custody services for cryptocurrency ETFs.

BNY Mellon’s entry into the crypto ETF custody market could threaten Coinbase’s dominance. The crypto exchange currently provides custody services for most of the spot Bitcoin ETFs in the US. This includes the largest of them, the ETF issued by BlackRock. According to the report, the crypto custody market is valued at approximately $300 million and is growing at around 30% per year.

BNY Mellon moves to custody cryptocurrencies

Companies that offer cryptocurrency custody services often charge significantly higher fees than those for traditional assets. This is because they face greater risks related to digital security.

BNY Mellon’s interest in cryptocurrencies is not new. After all, CEO Robin Vince publicly expressed this interest in January 2023, during an earnings call. At the time, he stated that digital assets represent the bank’s “long-term bet.”

As Bloomberg has learned, BNY Mellon already supports about 80% of SEC-approved Bitcoin and Ether exchange-traded products through its fund services.

With this new move, BNY Mellon positions itself to be a significant competitor in the growing crypto custody market, expanding its portfolio of services in the financial sector and consolidating its presence in the world of digital assets.

BNY Mellon Moves to Offer Cryptocurrency ETF Custody

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BNY Mellon Moves to Offer Cryptocurrency ETF Custody

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BNY Mellon Moves to Offer Cryptocurrency ETF Custody

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