Fireblocks Partners with Galaxy and Bakkt to Expand Institutional Crypto Custody

The New York-regulated custodian is working with Galaxy Digital, Bakkt, FalconX, and Castle Island to meet growing demand for secure digital asset storage.

The partnership comes as traditional financial institutions increasingly want regulated ways to hold cryptocurrencies. Fireblocks Trust Company operates under oversight from the New York Department of Financial Services (NYDFS), giving it the regulatory credentials that banks and investment firms require.

Why This Partnership Matters

Major financial institutions need qualified custodians to hold their crypto assets. Without proper custody solutions, institutions face legal and security risks when managing digital currencies. This partnership addresses that need by connecting Fireblocks’ infrastructure with established crypto service providers.

Fireblocks Trust Company’s infrastructure connects directly with more than 2,400 financial institutions. The platform uses cold storage technology, which keeps digital assets offline and away from potential hackers. This security approach has helped Fireblocks protect over $10 trillion in digital asset transactions across 100+ blockchains.

Source: @FireBlocksHQ

Adam Levine, CEO of Fireblocks Trust Company, said regulated custody has become the “catalyst” for institutional adoption of crypto. Matt Walsh, founding partner at Castle Island, emphasized that regulatory compliance and security are non-negotiable. He added that Fireblocks Trust Company delivers on both fronts with qualified custodian status and robust operational controls.

Galaxy’s Staking Integration

Galaxy Digital separately integrated with Fireblocks in July 2025 to expand its staking services. Through this integration, over 2,000 financial institutions that use Fireblocks can now access Galaxy’s staking platform. Staking allows crypto holders to earn rewards by helping validate transactions on blockchain networks.

Galaxy currently manages approximately $3.15 billion in staked assets. This marks Galaxy’s third custodial partnership in 2025, following deals with Zodia Custody and BitGo. The company is building a network of custody partners to make it easier for institutions to earn staking rewards without moving assets between platforms.

Zane Glauber, head of blockchain infrastructure at Galaxy, said the Fireblocks integration represents progress in making secure and capital-efficient staking available where institutions custody their digital assets.

Bakkt’s Existing Relationship

Bakkt has already been using Fireblocks technology to power its custody services. The NYDFS-licensed custodian uses Fireblocks’ multi-layer security approach, including on-premises infrastructure and policy engine tools to manage transaction approvals.

Sam Auch, Group Product Manager at Bakkt, explained that the company faced challenges with legacy systems built in 2018 that were secure but not scalable. Bakkt worked with Fireblocks to rebuild its custody solution from the ground up, creating a foundation that protects assets both cryptographically and through policy controls.

Market Growth and Regulatory Shifts

The institutional crypto custody market is growing fast. The sector is projected to reach $3.28 billion in 2025 and could grow to $15.75 billion by 2034, representing a 14.53% annual growth rate. This growth is driven by regulatory clarity and increasing institutional demand for digital asset services.

A major regulatory change came in January 2025 when the Securities and Exchange Commission (SEC) rescinded Staff Accounting Bulletin 121 (SAB 121). This rule had forced banks to hold customer crypto assets on their balance sheets, creating significant capital burdens. Removing this requirement made it easier for traditional banks to offer crypto custody without balance sheet volatility.

The change opened the door for more banks to enter the crypto custody space. Deutsche Bank announced plans in July 2025 to launch a digital asset custody service in 2026. Citigroup began exploring crypto custody and payment services. US Bancorp relaunched its digital asset custody services in September, targeting institutional investment managers.

Growing Institutional Demand

Financial institutions are showing strong interest in crypto custody for several use cases. These include exchange-traded fund (ETF) management, digital asset treasury operations, token launches, collateralized lending, and staking services.

The approval of Bitcoin ETFs has been a major driver. More than 30% of all known Bitcoin is now held by either ETFs or government entities. BlackRock’s IBIT Bitcoin ETF has grown to approximately $90 billion in assets under management as of October 2025, creating massive demand for custody services.

Fireblocks has also formed strategic partnerships beyond traditional custody. In September 2025, the company announced a collaboration with Circle Internet Group to help financial institutions build digital asset offerings. The partnership combines Circle’s stablecoin network with Fireblocks’ custody infrastructure for cross-border payments and tokenized asset settlement.

The company also partnered with Figment in September 2025 to offer institutional staking services. This integration allows Fireblocks Trust clients to earn staking rewards while keeping assets under qualified custody, addressing both yield generation and regulatory compliance needs.

The Road Ahead

Fireblocks Trust Company received its limited-purpose trust company charter from New York regulators in August 2024. This charter allows the company to engage in virtual currency business and offer cold storage custody solutions across the United States. The regulatory approval puts Fireblocks alongside other NYDFS-authorized custodians like Coinbase Custody Trust, Fidelity Digital Asset Services, and PayPal Digital.

As more institutions enter the crypto space, the focus has shifted from whether to adopt digital assets to how to do it safely and compliantly. Qualified custodians like Fireblocks Trust Company provide the regulated infrastructure that institutional investors require. With technology securing trillions in transactions and regulatory frameworks becoming clearer, institutional crypto adoption appears positioned for continued growth in 2025 and beyond.