10:25 AM EDT, 09/27/2024 (MT Newswires) -- A Bank of New York Mellon Corp. ( BK ) structure, used by the bank to offer custody services for crypto assets, could be used beyond the bitcoin and ether ETFs that the bank is considering, Bloomberg reported Friday, quoting US Securities and Exchange Commission Chair Gary Gensler.

BNY previously said it had submitted a plan to the SEC's Office of Chief Accountant, or OCA, to custody those two assets outside the bank's balance sheets.

Bloomberg reported that the plan would protect client funds in the event of an insolvency.

"After an in-depth consultation and review process, the OCA did not object to BNY's determination that custody of crypto-assets for regulated [exchange-traded products, or ETPs] for BNY's ETP clients should not be recognized on its balance sheet," BNY said in the previous statement.

BNY added that the "OCA's decision was specific to BNY's ETP use case, and does not solve the issue of [SEC Staff Accounting Bulletin No. 121] effectively restricting bank custody of digital assets. BNY will similarly engage with the OCA on additional use cases."

"Though the actual consultation related to two crypto assets, the structure itself was not dependent on what the crypto was," Bloomberg quoted Gensler as saying on Thursday after a speech at the Federal Reserve Bank of New York's US Treasury Market Conference. "It didn't matter what the crypto was."

"This bank, or any other bank if they came in with the same structure would get the same non-object," Bloomberg quoted Gensler as saying.

A BNY spokesperson declined to comment on Gensler's comments in reply to a request sent Friday by MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)