Morgan Stanley has named the Bank of New York Mellon and Coinbase as custodians for its planned Bitcoin Trust exchange-traded fund (ETF), according to a filing submitted to the U.S. Securities and Exchange Commission (SEC) on Wednesday. The Wall Street giant selected the global banking firm and the crypto exchange to safeguard the assets tied to the proposed Morgan Stanley Bitcoin Trust.
Morgan Stanley Throws Its Hat Into The Bitcoin ETF Ring
Morgan Stanley, ranked in the U.S. by total assets, plans to store its Bitcoin with Coinbase Custody and BNY.
According to the amended S-1 registration statement for the Morgan Stanley Bitcoin Trust, Coinbase Custody and BNY will store the fund’s entire Bitcoin holdings primarily in cold storage—offline systems used to safeguard private keys. A smaller portion of the BTC may periodically be transferred to internet-connected hot wallets to facilitate the creation and redemption of shares.
The filing stated that BNY Mellon operates as a New York state-chartered bank, while Coinbase Custody is structured as a New York state limited liability trust company. Both entities offer digital asset services, including custody and trade execution. The trust also noted that while custody insurance is in place, the coverage is pooled among multiple clients and may not fully protect against all possible losses.
BNY Mellon will also take on multiple roles within the ETF’s framework, acting as the fund administrator, transfer agent, and cash custodian. In these capacities, the bank will manage accounting functions, maintain shareholder records, and oversee the cash movements associated with ETF transactions.
Morgan Stanley initially submitted its S-1 registration for the spot Bitcoin ETF in January and also filed applications to launch exchange-traded funds tied to Ethereum and Solana. At the time, the firm did not disclose which institution would serve as custodian for the proposed Bitcoin fund. The ETF still awaits approval from the U.S. Securities and Exchange Commission before it can begin trading.
Similar to other Bitcoin ETFs, the proposed Morgan Stanley Bitcoin Trust is designed to follow the spot price of Bitcoin directly rather than using derivatives or leverage. However, pundits previously called the move a shocker, noting that the banking behemoth has had relatively limited involvement in the cryptocurrency sector so far.
Morgan Stanley’s ETF highlights increasing institutional interest in cryptocurrencies, even as the broader market faces a slump, with Bitcoin currently down roughly 42.9% from its all-time high of around $126,000.
The new fund will help Morgan Stanley cement its presence in the crypto space and generate strategic benefits for the firm, even if its performance falls short of major players like BlackRock’s iShares Bitcoin Trust.
Source: https://zycrypto.com/wall-street-bigwig-morgan-stanley-enlists-coinbase-and-bny-mellon-for-custody-of-upcoming-bitcoin-etf/
