BNY Mellon Partners with Galaxy to Offer Institutional Crypto Staking Support

BNY Mellon's Digital Asset Custody platform is planning to offer institutional crypto staking support through Galaxy's infrastructure, as announced on August 4. BNY Mellon manages approximately 20% of the world's investable assets, with $62.6 trillion in assets under custody and administration as of June 30.

Galaxy is one of three validator firms approved to stake Ethereum for BlackRock's iShares Staked Ethereum Trust (ETHB). The prospectus states that the fund can stake 70% to 95% of its holdings under normal conditions.

Institutional crypto staking separates ownership from control, as ETHB owns the ETH and collects the crypto staking rewards, while its custodian holds the private keys and controls withdrawals. Galaxy and other approved validators hold the validator keys and perform the validation work but do not gain access to the trust's staked ETH.

The structure 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.