A trillion-dollar financial giant officially enters the BTC ETF custody race, aiming to challenge Coinbase
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A trillion-dollar financial giant officially enters the BTC ETF custody race, aiming to challenge Coinbase
BNY Mellon received an exemption from the SEC's Staff Accounting Bulletin No. 121 (SAB 121) through a review by the Office of the Chief Accountant.
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According to Bloomberg News on September 24, following an exemption granted by the U.S. Securities and Exchange Commission (SEC), BNY Mellon has taken a significant step into the crypto asset custody market—particularly in custody services for Bitcoin and Ethereum ETFs.
The report stated that BNY Mellon received an exemption from SEC Staff Accounting Bulletin No. 121 (SAB 121) under review by the Office of the Chief Accountant.
This exemption allows the bank to classify crypto assets held on behalf of clients differently, meaning it does not need to record these assets as corporate liabilities.
This operational shift could enable more traditional banks to offer crypto asset custody services—something largely out of reach until now.
This development also positions BNY Mellon to challenge Coinbase’s current dominance in crypto asset management, advancing its own ambitions in crypto custody.
Providing custody services for spot Bitcoin and Ethereum ETFs could significantly disrupt the current market landscape, as Coinbase currently oversees most crypto ETFs on Wall Street—including those of major asset managers like BlackRock, which manages around $10 trillion in assets.
Currently, Coinbase holds a leading role in digital asset custody for these funds, but BNY Mellon’s entry may intensify competition and provide clients with more options.
Since early 2023, BNY Mellon has expressed strong interest in the crypto asset custody space.
In January of that year, CEO Robin Vince emphasized during an earnings call that digital assets are part of the company's long-term strategic vision, highlighting growing institutional client demand for digital asset services.
Analysts estimate the crypto asset custody market is growing at an annual rate of approximately 30% and is currently valued at $300 million.
If this growth trajectory continues, the market could exceed $1 billion by 2032, expanding by roughly $90 million annually.
Despite the promising outlook, regulatory challenges remain a major concern for BNY Mellon as it seeks to establish itself in the crypto custody arena.
Lawmakers including Representative Patrick McHenry and Senator Cynthia Lummis have raised concerns about the transparency of interactions between SEC staff and private companies.
In a bipartisan letter addressed to the SEC and other regulators, they referenced alleged private meetings discussing SAB 121 exemptions.
It remains unclear whether BNY Mellon’s exemption was part of these discussions, raising questions about the regulatory landscape surrounding the bank’s activities in the crypto market.
BNY Mellon’s success will depend heavily on its ability to navigate a complex regulatory environment while capitalizing on the rising institutional demand for digital asset services.
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