Morgan Stanley Taps Coinbase and BNY for New Bitcoin ETF Plan

TLDR

• Morgan Stanley filed an amended registration statement with the US Securities and Exchange Commission for its proposed Bitcoin Trust.
• The filing states that Coinbase Custody Trust Company will safeguard the Bitcoin holdings of the fund.
• BNY Mellon will act as the administrator, transfer agent, and cash custodian for the ETF.
• The trust plans to hold Bitcoin directly so that its share price follows Bitcoin market movements.
• Most of the Bitcoin will remain in offline cold storage vaults to reduce hacking risks.

Morgan Stanley filed an amended registration statement for its planned Bitcoin exchange-traded fund. The document names Coinbase Custody Trust Company as the Bitcoin custodian and BNY Mellon as the administrator. The structure outlines how the trust will store assets and process share transactions.

Morgan Stanley Outlines Structure for Proposed Bitcoin ETF

Morgan Stanley seeks to offer investors bitcoin exposure through standard brokerage accounts. The filing states the proposed Morgan Stanley Bitcoin Trust will hold bitcoin directly.

Shares will track prices and trade on exchanges within a regulated ETF structure. The approach allows retail and institutional participants to gain exposure without holding tokens.

Morgan Stanley submitted the initial registration for the trust to the SEC on January 6. The bank also filed a separate application for a Solana exchange-traded fund.

The amended document explains that Coinbase Custody will safeguard the trust’s bitcoin reserves. BNY Mellon will manage accounting records, transfer services, and cash linked to ETF operations.

The prospectus states the trust will operate as a passive investment vehicle. It plans to mirror bitcoin price movements by holding the digital asset.

According to the filing, most Bitcoin will remain inside offline cold storage vaults. Cold storage keeps private keys disconnected from the internet and lowers hacking risk.

However, the trust may move limited bitcoin into trading wallets during share creation. Those transfers support market makers that create or redeem ETF shares.

Custody Structure and Pricing System Detailed in Filing

The filing states that custody insurance exists, but coverage spreads across several client accounts. It adds that policies may not reimburse every loss tied to digital asset storage.

Morgan Stanley plans to calculate net asset value using the CoinDesk Bitcoin Benchmark rate. The benchmark uses trade data from spot exchanges to produce a daily reference.

The index fixes its settlement price each day at four PM New York. That value will guide the trust’s official pricing and daily net asset value.

The prospectus lists BNY as the cash custodian for ETF transactions. It will process subscription payments and redemption proceeds linked to authorized participants.

Coinbase Custody Trust Company will hold private keys tied to the trust’s bitcoin. The custodian already provides digital asset storage services for several institutional investment products.

Morgan Stanley earlier applied for a national trust bank charter covering cryptocurrency custody. Approval would allow the bank to store digital assets directly for institutional clients.

The amended S-1 filing details operational roles for Coinbase Custody and BNY. The document remains under review by the US Securities and Exchange Commission.

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