PREDICT BITCOIN
Morgan Stanley has tapped Coinbase and BNY Mellon to serve key custody and administrative roles for its proposed spot Bitcoin exchange-traded fund, according to an amended registration statement filed with the U.S. Securities and Exchange Commission.
The filing for the Morgan Stanley Bitcoin Trust outlines a structure in which Coinbase Custody Trust Company and BNY will act as bitcoin custodians, responsible for safeguarding the fund’s digital assets and facilitating transfers tied to share creations and redemptions.
BNY will also serve as administrator, transfer agent and cash custodian, overseeing accounting, shareholder records and cash management for the trust.
The ETF is designed as a passive vehicle that will hold bitcoin directly rather than using derivatives or leverage. Shares of the trust would reflect the performance of the underlying bitcoin held in custody, giving investors exposure through brokerage accounts without requiring direct ownership of the cryptocurrency.
Under the proposed custody framework, most of the trust’s bitcoin would be stored in offline cold-storage vaults, where private keys remain disconnected from the internet.
The structure is a popular one and is intended to reduce exposure to cyber threats that have long concerned institutional allocators.
A portion of the holdings may move to trading wallets during periods of share creation or redemption, when authorized participants exchange cash for bitcoin or redeem shares for the underlying asset.
The filing notes that custody insurance is maintained but shared across multiple clients and may not cover all potential losses. The disclosure mirrors language used across other spot Bitcoin ETF filings, reflecting industry practice as traditional asset managers move into direct digital asset exposure.
Morgan Stanley first filed for the trust in January, marking one of the most significant entries by a major U.S. bank into the spot Bitcoin ETF race.
Morgan Stanley: Bullish on bitcoin
The latest filing comes as Morgan Stanley expands its crypto strategy across its wealth management and brokerage platforms. Executives have said the firm plans to allow clients on its E*Trade platform to buy and sell spot cryptocurrencies through a partnership before rolling out a more integrated custody and exchange solution.
Last week at Strategy World, Amy Oldenburg, head of digital asset strategy at Morgan Stanley, said the bank views custody as a core component of its long-term roadmap. The firm manages about $8 trillion in client assets, and leadership has indicated that a significant share of clients already hold crypto off-platform.
Bringing those holdings in-house would allow Morgan Stanley to provide custody, trading and related services under its own oversight.
The bank has also applied for a national trust bank charter that would permit it to hold cryptocurrencies directly for institutional clients. Approval would position Morgan Stanley to compete with crypto-native custodians and deepen its role in the digital asset market.
