Where Does Strategy Store Its Bitcoin? SEC Inquiry Sheds Light on Potential Custodians

Bitcoin Custody Mystery: Strategy’s Confidential Disclosure and the List of Potential Custodians

The collapse of several prominent financial institutions between late 2022 and 2023 rattled the cryptocurrency industry and raised serious concerns for investors, regulators, and market participants. For companies holding substantial amounts of Bitcoin, the turbulence surrounding the downfall of FTX, Silvergate Bank, and Signature Bank placed a spotlight on how and where such assets were stored—and whether they remained secure amid widespread financial instability.

One such company under scrutiny was Strategy, a major institutional holder of Bitcoin. In the aftermath of FTX’s $8 billion collapse, followed by the forced closures of Silvergate and Signature in March 2023, the U.S. Securities and Exchange Commission (SEC) reached out to Strategy with direct questions about its Bitcoin holdings. In particular, the SEC wanted clarity on who Strategy’s custodians were, especially since it was publicly known that some of Strategy’s Bitcoin had been used as collateral for a loan from the now-defunct Silvergate Bank.

Strategy's Response to SEC: Confidentiality via Rule 83

In response to the SEC’s request, Strategy did reply—but invoked SEC Rule 83, a provision that allows companies to keep certain details confidential. While this move kept the exact names of its custodians private, the company did reveal some crucial characteristics about its custodial partners:

This disclosure, while somewhat vague, significantly narrows down the list of potential custodians, as there are only a limited number of NYDFS-regulated entities with the required trust charters.

The Shortlist: NYDFS-Regulated Custodians in 2023

As of spring 2023, only nine NYDFS-licensed entities held limited purpose trust charters, making them eligible custodians:

1. BitGo

2. Coinbase

3. GMO-Z.com

4. Fidelity Digital Assets

5. Bakkt Trust Company

6. Gemini

7. NYDIG

8. Paxos

9. Standard Custody & Trust Company

Among these, some have already been linked to Strategy directly or indirectly.

Coinbase: A Known Partner in Strategy’s Bitcoin Journey

Coinbase emerges as a probable custodian given its historical ties with Strategy. Not only has Coinbase been cited in multiple MSTR filings as Strategy’s “principal market for Bitcoin”, but the company also executed its first-ever Bitcoin purchase via Coinbase.

Moreover, Coinbase's institutional-grade custody solution, Coinbase Custody, is specifically designed for entities like Strategy that require highly secure, compliant storage for digital assets. Coinbase's custodial services are NYDFS-regulated, adding another layer of credibility and security.

Fidelity Digital Assets: A Potential Yet Unconfirmed Custodian

Blockchain analytics platform Arkham Intelligence stirred speculation by claiming to have traced approximately 70,000 BTC linked to Strategy to Fidelity Digital Assets in May 2023. While Strategy has not publicly confirmed this relationship, Fidelity certainly fits the profile.

A source familiar with Fidelity Digital Assets’ operations informed Decrypt that the firm upholds strict confidentiality regarding client holdings. This adherence to privacy protocols has only fueled the conjecture surrounding Strategy’s possible reliance on Fidelity.

Under-the-Radar Custodians: GMO-Z.com, Standard Custody & Others

While Coinbase and Fidelity stand out as the leading candidates, other lesser-known but qualified entities warrant mention.

• GMO-Z.com is the U.S. arm of GMO Internet Group, a Japanese conglomerate with diversified interests including crypto exchanges and stablecoins. However, it primarily manages reserves for its own stablecoins like GYEN and ZUSD, making it an unlikely custodian for Strategy’s Bitcoin.

• Standard Custody & Trust Company, now owned by Ripple following a June 2024 acquisition, is another institution-grade custodian with NYDFS regulation. Previously a subsidiary of PolySign, which was co-founded by Ripple’s leadership, Standard Custody specializes in white-label custody solutions, positioning itself discreetly within the institutional market.

• Bakkt Trust Company had once been a promising Bitcoin custodian, established through Bakkt’s acquisition of the Digital Asset Custody Company. However, its trajectory changed when it sold its custody business to its parent company, Intercontinental Exchange (ICE). Whether Bakkt's custody operations still actively serve clients remains unclear, as neither Bakkt nor ICE responded to recent inquiries.

Gemini, NYDIG, and Paxos: Other Plausible Contenders

• Gemini Trust Company, founded by the Winklevoss twins, is a prominent NYDFS-regulated custodian with a solid track record in digital asset security.

• NYDIG (New York Digital Investment Group) is another major player in institutional Bitcoin solutions, catering to corporate treasuries and banks.

• Paxos offers regulated custody services and is well-integrated within financial markets, known for partnerships with PayPal and other fintech giants.

While none of these firms have been officially confirmed as Strategy’s custodians, their regulatory status and infrastructure make them viable candidates.

Why This Matters: The Criticality of Bitcoin Custody Post-FTX

Following the disastrous implosion of FTX and the failure of Silvergate and Signature Bank, the crypto sector faced intense scrutiny over custodial security. For large holders like Strategy, where billions of dollars in BTC are on the balance sheet, custody is not just a technical question—it is a matter of financial solvency and shareholder confidence.

Moreover, given that Strategy had once used part of its Bitcoin holdings as collateral against loans with Silvergate, transparency around custody is paramount for regulators, especially the SEC, which monitors financial risk disclosures for publicly traded firms.

Conclusion: A Tightly Held Secret—But a Finite List

Despite Strategy’s exercise of its right to confidentiality under SEC Rule 83, the combination of regulatory constraints, institutional infrastructure, and public blockchain analysis narrows the list of custodians. While Coinbase and Fidelity remain the most likely custodians, other regulated entities like Gemini, NYDIG, and Standard Custody remain in play.

As the crypto market matures, and with institutional Bitcoin holdings growing, questions around custody transparency will only intensify, especially for companies whose financial health is so closely tied to their digital asset reserves.

Svetlana Petkova publication: "Where Does Strategy Store Its Bitcoin? SEC Inquiry Sheds Light on Potential Custodians" was written for 24crypto.news

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