The Securities and Exchange Commission (SEC) has granted approval to the Bank of New York Mellon Corp (BNY) to expand its custody of cryptocurrency assets, marking a significant development in traditional banking\u2019s involvement with digital assets. SEC Chair Gary Gensler announced this approval on Thursday following a speech at the Federal Reserve Bank of New York. With this new approval, BNY Mellon, which manages over $2 trillion in crypto assets, can now offer broader custody services beyond its current offerings tied to crypto exchange-traded funds (ETFs).<\/p>\n\n\n\n
BNY Mellon already provides custody services for Bitcoin and Ethereum ETFs. However, the bank recently submitted a plan to the SEC\u2019s Office of Chief Accountant to offer more comprehensive custody services for these two major cryptocurrencies. This structure is designed to protect customer funds in the event of bank insolvency, a critical step in ensuring asset security. The SEC responded with a “non-objection” to the plan, essentially greenlighting BNY\u2019s proposal.<\/p>\n\n\n\n
SEC Chair Gary Gensler emphasized that the approval isn\u2019t limited to just Bitcoin or Ethereum. \u201cThough the actual consultation related to two crypto assets, the structure itself was not dependent on what the crypto was,\u201d Gensler told Bloomberg News<\/em>. \u201cIt didn\u2019t matter what the crypto was,\u201d he added, highlighting the flexibility of the approved framework.<\/p>\n\n\n\n The approved structure includes several key safeguards, such as the use of individual crypto wallets. Each wallet would have its own separate bank account, preventing the commingling of customer assets with the bank\u2019s assets. This move is intended to provide an added layer of protection for customers, ensuring that their funds remain secure even if the bank faces financial difficulties. Gensler noted that this approach is not exclusive to BNY Mellon, saying, \u201cThis bank, or any other bank if they came in with the same structure would get the same non-object.\u201d<\/p>\n\n\n\n According to Gensler, other banks and financial institutions have also approached the SEC with potential models for digital asset custody. He credited BNY Mellon for laying the groundwork, stating that the bank had done the \u201clegwork\u201d to ensure customer assets would remain protected in various scenarios.<\/p>\n\n\n\n As the world\u2019s largest custodian bank, BNY Mellon\u2019s foray into crypto custody could influence other financial institutions to follow suit. Founded through the merger of the Bank of New York and Mellon Financial Corporation in 2007, BNY Mellon holds over $49 trillion in assets and has taken a leading role in integrating digital assets into the traditional banking system.<\/p>\n","protected":false},"excerpt":{"rendered":" The Securities and Exchange Commission (SEC) has granted approval to the Bank of New York Mellon Corp (BNY) to expand its custody of cryptocurrency assets, marking a significant development in traditional banking\u2019s involvement with digital assets. SEC Chair Gary Gensler announced this approval on Thursday following a speech at the Federal Reserve Bank of New […]<\/p>\n","protected":false},"author":18,"featured_media":5140,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[43,40],"tags":[],"class_list":{"0":"post-11554","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-general-news","8":"category-regulation"},"acf":[],"yoast_head":"\nKey Features of BNY\u2019s Custody Structure<\/h3>\n\n\n\n
Implications for Other Banks and Crypto Custody<\/h3>\n\n\n\n