Wall Street Giants BNY and BlackRock Funnel Billions Through Galaxy Infrastructure

Two of Wall Street's largest names, Bank of New York (BNY) and BlackRock, have partnered to provide institutional crypto staking support through Galaxy's infrastructure. This move has raised concerns about the concentration of power in the crypto ecosystem.

BNY touches roughly 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 approved validator firms for BlackRock's iShares Staked Ethereum Trust (ETHB), which can stake 70% to 95% of its holdings under normal conditions.

The prospectus warns that slashing, inactivity penalties, and correlated penalties across many validators can cause losses that the trust may never recover from. This has sparked concerns about the risks associated with institutional crypto staking.

Ethereum's documentation shows that validators controlling more than 33% of staked ETH can prevent the chain from finalizing blocks if they go offline or attest incorrectly. A share above 66% can finalize a preferred version of the chain outright, posing a significant risk to the network.