The SEC has approved the Bank of New York Mellon Corp (BNY)’s custody of crypto assets beyond crypto ETFs. SEC Chair Gary Gensler revealed the revelation Thursday following a speech in front of the Fed of New York. The BNY Bank controls $2 trillion in crypto assets and has now been approved by the Securities and Exchange Commission to offer crypto custody services.
The structure that BNY currently uses to offer its crypto custody services already includes Bitcoin and Ethereum ETFs. However, the bank recently presented a plan to the SEC’s Office of Chief Accountant to custody those two assets in a way that would protect customer funds in the event of bank insolvency. The SEC granted BNY with a “non-objection” to the plan.
“Though the actual consultation related to two crypto assets, the structure itself was not dependent on what the crypto was,” Gensler told Bloomberg News on Thursday. He added, “It didn’t matter what the crypto was.”
SEC Chair Gensler Approves BNY Crypto Custody
Additionally, Gensler says that BNY’s proposed structure includes the use of individual crypto wallets. Each of these wallets would have a separate bank account and would be prohibited from being comingled with bank assets. According to the SEC Chair, it is up to the bank to decide whether to expand the pool of digital asset use cases it’s comfortable custodying. “This bank, or any other bank if they came in with the same structure would get the same non-object.”
Furthermore, Gary Gensler also explained how other banks and brokers have also discussed potential digital asset custody structures. He credited BNY for doing the “legwork” on how to make sure customer assets would remain theirs.
BNY is the world’s largest custodian bank. It was formed in July 2007 by the merger of the Bank of New York and Mellon Financial Corporation. It currently holds over $49 trillion in assets.