Details reveal cold and hot wallet strategy and regulatory oversight for secure Bitcoin ETF operations
Morgan Stanley has chosen BNY Mellon and Coinbase Custody Trust Company as custodians for its proposed Morgan Stanley Bitcoin Trust ETF, according to an amended filing with the U.S. Securities and Exchange Commission (SEC). The updated filing provides new details on how the fund plans to securely store and manage its Bitcoin holdings.
The filing shows that most of the Bitcoin will be held in cold storage, offline to minimize security risks, while a smaller portion will remain in hot wallets to support share creation and redemption.
The fund is structured as a spot Bitcoin ETF, aiming to track Bitcoin’s price directly for investors.
Custody and Operational Structure
Under the plan, BNY Mellon will act as custodian, administrator, transfer agent, and cash custodian. Meanwhile, Coinbase will serve as prime broker alongside its custody role, handling trade execution and operational support.
Both entities are regulated in New York: BNY Mellon as a state-chartered bank and Coinbase Custody as a trust company.
Why This Matters
Morgan Stanley’s initial ETF filing in January did not disclose custodians. The SEC must approve the fund before it can begin trading.
BNY Mellon and Coinbase will handle custody and operations for the ETF, providing regulated storage and trading support. The arrangement follows a trend of Wall Street firms filing or launching crypto ETFs.
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