BNY Mellon has been authorized to be the transfer agent and administrator of Bitwise Asset Management’s proposed Bitcoin exchange-traded fund. As of December 2018, the New York-based bank had over $33 trillion in assets under custody and has been involved in cryptocurrency and blockchain before.
According to Tom Casteleyn, BNY Mellon’s global head of custody product management, there aren’t any large custodian banks offering custody for crypto. He credits New York’s Department of Financial Services for introducing BitLicences for cryptocurrency providers, and says more needs to be done.
“To date, no large custodian banks offer custody for digital currencies. There are cryptocurrency custodians operating with trust licenses and financial services licenses, but none with a deposit-taking bank license.”
On September 11, Bitwise amended the S-1 form that had been submitted to the United States SEC to include BNY Mellon as transfer agent and administrator. It had also previously listed accounting firm Cohen & Company as auditor and Foreside Fund Services legal firm as marketing agent. Bitwise is yet to decide on a company to act as its Bitcoin custodian, for safekeeping of the digital asset owned by the company. And whether the firms will act according to their appointed positions depends on the pending decision to be made by U.S. financial regulators.
Bitwise had filed its proposed change to the Securities Act of 1993 to allow its Bitcoin ETF on the NYSE Arca in January, earlier this year. Since then, a series of delays have occurred due to regulator worries about possible tampering in cryptocurrency markets and the ensuing effect it could have on proposed Bitcoin ETFs.
Recently, Jay Clayton, chairman of the SEC, said that progress is being made with respect to a Bitcoin ETF, but that the agency still had work to be done.
While Bitwise struggles to get approval from the SEC, VanEck SolidX received a quick nod from the regulator by only offering Bitcoin ETFs to “qualified institutional buyers.”
During an interview, Hunter Horsley, CEO of Bitwise, said that the SEC has been open regarding its concerns about a Bitcoin ETF and maintains, despite the delays, that it will eventually be listed.
A final decision is expected to arrive by October 13th this year.