SEC allows bank BNY Mellon to expand its crypto storage asset services

The commission’s chair said that the bank’s approach to storage is suitable for a variety of cryptocurrencies, not just BTC and ETH

27.09.2024 - 15:40

2 min

What’s new? US Securities and Exchange Commission (SEC) Chair Gary Gensler has announced that the country’s oldest bank, BNY Mellon, is allowed to expand its crypto custodial services. The bank currently offers custody services for issuers of bitcoin and Ethereum-based exchange-traded funds (ETFs).

Material by Bloomberg

What else is known? Earlier this week, the SEC approved the bank’s plan to store BTC and ETH for exchange-traded funds, which provides protection for customers in the event of an insolvency. The bank said that the approval refers specifically to the way cryptocurrencies are stored for ETFs. However, itself Gensler later supplemented the position of the agency:

“Though the actual consultation related to two crypto assets, the structure itself was not dependent on what the crypto was.”

The official added that the bank can now optionally expand the list of uses for the digital assets it is comfortable holding.

By getting BNY approved to provide custodial services that involve segregating its own assets from those of its clients, the bank is exempt from SAB Rule 121.

Under this SEC rule, custodians must account for clients’ crypto assets on their balance sheets as liabilities.

SAB 121 drew heavy criticism in both houses of Congress, which later passed a bill to repeal it. In response, the President’s administration vetoed the bill and the rule remained in place. This month, congressmen reapplied to the SEC to repeal SAB 121.

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