SEC Approves BNY Mellon’s Expansion of Crypto Custody Services Beyond Bitcoin and Ethereum ETFs
The U.S. Securities and Exchange Commission (SEC) has approved BNY Mellon’s proposal to expand its crypto custody services beyond existing ETF offerings. BNY Mellon currently manages over $2 trillion in crypto assets and has received a regulatory ’no-objection’ to hold Bitcoin (BTC) and Ethereum (ETH) without listing them as balance sheet liabilities. This approval allows BNY Mellon to further extend its custody services to a broader range of digital assets. SEC Chair Gary Gensler has emphasized that the custody structure is applicable across different crypto assets. This move enhances BNY Mellon’s competitive position within the rapidly growing crypto custody market, currently valued at $300 million and expanding at an annual rate of 30%. The strategic expansion is designed to attract institutional clients by offering secure, separate custody of digital assets. This development potentially sets a precedent for other banks to follow similar models, aiming for enhanced regulatory compliance and customer protection.
Bullish
The SEC’s approval of BNY Mellon’s expanded crypto custody services indicates a positive regulatory development for institutional involvement in the cryptocurrency market. This move could increase confidence among institutional investors, leading to larger inflows of capital into the crypto market. Furthermore, it sets a strategic precedent for other financial institutions to enter the crypto space, potentially broadening the market and increasing liquidity. The growth of regulated, secure custody solutions is likely to enhance market stability and attract long-term investments.