Wed Sep 25 04:30:29 UTC 2024: ## BNY Mellon Takes Major Step Towards Bitcoin and Ethereum Custody Services

**New York, NY** – Bank of New York Mellon (BNY Mellon) is nearing the launch of custody services for Bitcoin (BTC) and Ethereum (ETH), following a significant exemption from the Securities and Exchange Commission (SEC).

This exemption, granted to BNY Mellon by the SEC, allows the bank to avoid classifying cryptocurrency custody as a balance-sheet liability, making it the first bank to receive this approval.

The news was revealed during testimony by Chris Land, general counsel for pro-Bitcoin US Senator Cynthia Lummis. The SEC’s Office of the Chief Accountant reviewed BNY Mellon’s determination that safeguarding crypto assets for regulated Exchange-Traded Products (ETPs) clients should not be recognized as a liability.

While this exemption is a major step forward for BNY Mellon, it does not resolve the broader issues surrounding the SEC’s Staff Accounting Bulletin (SAB) 121, which currently limits banks’ ability to custody digital assets.

BNY Mellon has stated its commitment to working further with the SEC’s Office of the Chief Accountant to explore additional use cases for crypto custody, utilizing a “facts and circumstances” approach. The bank is also actively collaborating with its banking regulators to facilitate large-scale custody services for crypto ETP clients.

The crypto custody market is experiencing rapid growth, with estimations suggesting a potential worth of $300 million and an annual growth rate of 30%. The demand for secure custody solutions is driven by the increasing value of digital assets and the heightened risk of cyber threats.

BNY Mellon, managing over $50 trillion in assets, is confident in the demand for bank-qualified custodians of digital assets. The bank currently supports 80% of SEC-approved Bitcoin and Ether ETPs through its fund services business and aims to provide clients with a comprehensive end-to-end solution by offering crypto custody.

The recent launch of US spot Bitcoin exchange-traded funds has further underscored the growing opportunities within the crypto custody sector. Major firms like BlackRock and Fidelity Investments have already invested heavily in these products.

This move by BNY Mellon signifies a significant step towards mainstream adoption of cryptocurrencies and further demonstrates the growing interest of traditional financial institutions in the digital asset space.

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