BNY Mellon and BlackRock Partner with Galaxy for Institutional Crypto Staking
BNY Mellon and BlackRock have partnered with Galaxy to provide institutional crypto staking support through their infrastructure. This move has exposed the fragile illusion of crypto diversification, as two of Wall Street's largest names now route institutional crypto staking through the same provider.
Galaxy is one of three validator firms approved to stake Ethereum for BlackRock's iShares Staked Ethereum Trust (ETHB). The prospectus says the fund can stake 70% to 95% of its holdings under normal conditions. Galaxy also runs staking for Solana and other proof-of-stake networks, extending that overlap across multiple chains.
The structure of institutional crypto staking separates ownership from control. ETHB owns the ETH and collects the crypto staking rewards, while its custodian holds the private keys and controls withdrawals. Galaxy and the other approved validators hold the validator keys and perform the validation work, but they never gain the keys needed to move the trust's staked ETH themselves.
This setup is safer than handing tokens to a validator, but the shareholder who owns the economic exposure still has no say in how the validator behaves once it is running. The investor supplies the economic stake and collects the yield, while the product sponsor decides staking allocation and disclosure, and the custodian holds keys and controls withdrawal authority.