Morgan Stanley plans to store Bitcoin for its ETF with Coinbase and BNY
Investment bank Morgan Stanley has filed a prospectus with the U.S. Securities and Exchange Commission (SEC) for its proposed Morgan Stanley Bitcoin Trust, outlining details of the fund’s crypto custody infrastructure. According to the filing, the bank plans to use Coinbase Custody and BNY as custodians for the fund’s Bitcoin holdings.
Both institutions will be responsible for safeguarding the digital assets and facilitating transactions related to the creation and redemption of ETF shares. The structure is designed to align with institutional standards for financial products, CoinDesk reported.
Bitcoin to be stored in cold storage
According to the prospectus, the majority of the fund’s Bitcoin will be held in offline cold storage vaults, where private keys remain disconnected from the internet. This approach aims to reduce the risks of hacking and unauthorized access.A portion of the assets may temporarily move to trading wallets during ETF share creation or redemption activity. The filing also notes that the assets are covered by custody insurance, though the coverage is shared across clients and may not fully compensate all potential losses.
BNY to take on multiple roles in the fund
Financial institution BNY will serve several functions within the ETF structure. In addition to acting as a custodian, the bank will also operate as the fund administrator, transfer agent, and cash custodian, handling accounting, shareholder records, and cash flows tied to ETF transactions. The Morgan Stanley Bitcoin Trust will be structured as a passive investment vehicle, designed to track the price of Bitcoin by holding the cryptocurrency directly rather than using derivatives or leverage.To calculate its net asset value, the fund will rely on the CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate, an index that aggregates trading data from major spot exchanges to determine Bitcoin’s daily reference price.
Earlier, we reported that Morgan Stanley has been advancing its crypto strategy by hiring DeFi specialists.
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