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BNY Mellon to serve as administrator, transfer agent, and cash custodian for Morgan Stanley’s proposed Bitcoin Trust
Key details:
- The Morgan Stanley Bitcoin Trust intends to secure its bitcoin with Coinbase Custody and Bank of New York Mellon, with BNY also fulfilling roles as administrator, transfer agent, and cash custodian.
- CoinDesk benchmark for pricing: The ETF will track bitcoin using the CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate, which aggregates trading activity across significant spot exchanges to establish the fund’s daily valuation.
Morgan Stanley (MS) has submitted a prospectus to the Securities and Exchange Commission (SEC) detailing the framework of the proposed Morgan Stanley Bitcoin Trust, indicating that the fund aims to utilize Coinbase Custody (COIN) and the Bank of New York Mellon (BNY Mellon) to protect its bitcoin assets, as per a form S‑1 filed.
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Both entities will act as custodians for the trust’s bitcoin, responsible for storing the digital assets and managing transfers related to the creation and redemption of shares.
The filing describes a custody arrangement designed to reflect conventional institutional standards. Bitcoin will primarily be stored in offline cold storage vaults, where private keys are kept disconnected from the internet to minimize hacking vulnerabilities. A portion of the assets may temporarily transfer to trading wallets during ETF creation or redemption processes. The trust mentions that custody insurance is available but is shared among clients and may not cover all possible losses.
BNY Mellon will additionally assume several more responsibilities within the ETF framework. The bank will act as the fund administrator, transfer agent, and cash custodian, managing accounting, shareholder records, and cash flows associated with ETF transactions.
The ETF itself will be organized as a passive vehicle aimed at tracking the value of bitcoin by directly holding the cryptocurrency, rather than relying on derivatives or leverage.
The filing further indicates that the trust will determine its net asset value based on the CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate, which compiles trade data from major spot exchanges to establish the daily reference price for bitcoin.
