SEC Grants BNY Mellon Approval for Broader Crypto Custody Services Beyond ETFs

The Securities and Exchange Commission (SEC) has officially granted approval for the Bank of New York Mellon Corp (BNY) to expand its custody services for crypto assets beyond just crypto-based ETFs. SEC Chair Gary Gensler made this announcement on Thursday during a speech at the Federal Reserve Bank of New York. BNY Mellon, which oversees $2 trillion in crypto assets, has now received SEC authorization to offer broader crypto custody services.

BNY Mellon has already been offering crypto custody for Bitcoin and Ethereum ETFs. However, the bank recently proposed a new framework to the SEC’s Office of Chief Accountant. The plan was designed to ensure customer assets would be protected, even if the bank were to become insolvent. This proposal was met with a “non-objection” from the SEC.

Gensler explained to Bloomberg News, “Although the review focused on two specific crypto assets, the structure itself wasn’t tied to the type of crypto.” He emphasized, “The nature of the asset didn’t make a difference.”

The new structure proposed by BNY Mellon includes the use of individual crypto wallets for clients. Each wallet will have its own dedicated bank account, separate from the bank’s assets, preventing any comingling. Gensler noted that while BNY Mellon has this structure in place, it’s ultimately the bank’s decision whether to extend its custody services to additional digital assets. “Any bank proposing a similar structure would receive the same approval,” he added.

Gensler also pointed out that other banks and brokerage firms are exploring their own models for digital asset custody. He acknowledged BNY Mellon for leading the way and putting in the effort to ensure customer assets are safeguarded.

As the largest custodian bank globally, BNY Mellon was created through the merger of the Bank of New York and Mellon Financial Corporation in 2007. Today, it manages more than $49 trillion in assets, making its expansion into crypto custody a significant development in the financial sector.

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