Morgan Stanley (MS) has filed a prospectus with the Securities and Exchange Commission (SEC) describing the structure of the Morgan Stanley Bitcoin Trust project, revealing that the fund plans to use Coinbase Custody (COIN) and Bank of New York Mellon (BNY) to protect its bitcoin holdings, according to a Form S-1 submission.
The two institutions will serve as the trust’s Bitcoin custodians, responsible for storing digital assets and facilitating transfers related to share creations and redemptions.
The filing describes a custody structure designed to reflect traditional institutional norms. Bitcoin will largely be kept in offline cold storage vaults, where private keys remain disconnected from the Internet to reduce the risk of hacking. A portion of assets may be temporarily moved to trading portfolios during ETF creation or redemption activity. The trust notes that custodian insurance exists but is shared between clients and may not cover all potential losses.
BNY will also play several additional roles within the ETF structure. The bank will serve as fund administrator, transfer agent and liquidity custodian, managing accounting, shareholder records and cash flow relating to ETF transactions.
The ETF itself will be structured as a passive vehicle designed to track the price of bitcoin by directly owning the cryptocurrency 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 trading data from major spot exchanges to determine bitcoin’s daily benchmark price.
