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 Bank of New York Mellon (BNY) to safeguard its bitcoin holdings, according to an S-1 filing.
The two institutions will act as the trust’s bitcoin custodians, responsible for storing the digital assets and facilitating transfers related to the creation and redemption of shares.
The presentation describes an escrow structure designed to reflect 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 assets may be temporarily moved into trading portfolios during ETF creation or redemption activity. The trust notes that escrow insurance exists, but it is shared between clients and may not cover all potential losses.
BNY will also perform several additional functions within the ETF structure. The bank will act as a fund manager, transfer agent and cash custodian, handling the accounting, shareholder records and cash flows linked 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 CoinDesk’s Bitcoin benchmark New York settlement rate at 4 p.m., which aggregates trading data from major spot exchanges to determine bitcoin’s daily reference price.
