Bank of New York Mellon (BNY) is about to offer custody services for bitcoin and ethereum for its ETF clients. This comes after the U.S. Securities and Exchange Commission (SEC) decided after a review that BNY does not need to comply with the controversial crypto asset accounting rule SAB 121.
The bank said in a statement on Tuesday that the SEC's Office of the Chief Accountant conducted a review earlier this year and did not object to its decision that crypto assets held for clients of its regulated ETFs should not be recognized on BNY Mellon's balance sheet.
The Office of the Chief Accountant has not objected to some other financial institutions in recent months. "Certain broker-dealers and custodian banks have fully demonstrated to the SEC staff that their fact patterns are different from those described in SAB 121," an SEC spokesperson said.
The SEC said that these companies still have to ensure that customers still have title to their assets even in the event of bankruptcy. "In this case, as long as their customers receive the same protections in terms of crypto asset protection as in a custodial arrangement, their balance sheet treatment is also the same as in a custodial arrangement," the SEC added. (Bloomberg)
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