Morgan Stanley taps Coinbase and BNY Mellon for custody in proposed Bitcoin ETF

BNY Mellon to act as administrator, transfer agent and cash custodian for Morgan Stanley’s proposed Bitcoin Trust

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What to know:

• The Morgan Stanley Bitcoin Trust plans to store its bitcoin with Coinbase Custody and Bank of New York Mellon, with BNY also serving 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 major spot exchanges to determine the fund’s daily valuation.

Morgan Stanley (MS) has filed with the Securities and Exchange Commission (SEC) a prospectus outlining the structure of the proposed Morgan Stanley Bitcoin Trust, revealing that the fund plans to use Coinbase Custody (COIN) and the Bank of New York Mellon (BNY Mellon) to safeguard its bitcoin holdings, according to a form S‑1 submitted.

The two institutions will serve as the trust’s bitcoin custodians, responsible for storing the digital assets and facilitating transfers related to share creations and redemptions.

The filing outlines a custody structure designed to mirror traditional institutional standards. Bitcoin will largely be held in offline cold storage vaults, where private keys remain disconnected from the internet to reduce hacking risks. A portion of the assets may temporarily move to trading wallets during ETF creation or redemption activity. The trust notes that custody insurance exists but is shared across customers and may not cover all potential losses.

BNY Mellon will also play several additional roles within the ETF structure. The bank will serve as the fund administrator, transfer agent, and cash custodian, handling accounting, shareholder records, and cash flows tied to ETF transactions.

The ETF itself will be structured as a passive vehicle designed to track the price of bitcoin by holding the cryptocurrency directly rather than using derivatives or leverage.

The filing also states that the trust will calculate its net asset value using the CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate, which aggregates trade data from major spot exchanges to determine the daily reference price for bitcoin.

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