Mike Belshe Claims BitGo Outsmarts the SEC’s Custody Rules

In response to the US Securities and Exchange Commission’s recent investor bulletin on crypto custody, BitGo CEO Mike Belshe has positioned his firm as the only provider offering all the custody options described by the SEC.

It comes only days after BitGo secured regulatory approval to operate as a bank, effectively expanding its institutional services.

BitGo Claims It Can Do What No Other Crypto Custodian Can

In a post on X (Twitter), Belshe emphasized that the BitGo exchange enables institutions to combine self-custody and third-party custody into a single hybrid strategy, creating custom risk profiles that no other provider can replicate.

The SEC bulletin, released on December 12, 2025, outlined the basics of crypto custody for retail investors, defining two primary models:

• Self-custody, where investors hold their private keys, and
• Third-party custody, where a qualified custodian manages assets.

While most providers require clients to pick one model, BitGo allows institutions to utilize both simultaneously.

Under BitGo’s framework, 90% of client assets can be stored in BitGo Trust cold storage, meeting standards of regulatory compliance, insurance, and security.

The remaining 10% can reside in self-custody hot wallets, enabling real-time transactions and operational flexibility.

This hybrid approach mitigates single points of failure. If self-custody keys are lost, assets in the trust remain safe, while traditional exchanges would risk freezing all funds in the event of insolvency.

BitGo Bank & Trust, NA, a federally chartered national bank, underpins the platform’s third-party custody solution. Subject to regular SOC 1 Type 2 and SOC 2 Type 2 audits, the bank supports more than 1,400 coins and tokens under segregated accounts, backed by a $250 million insurance policy from Lloyd’s of London syndicates.

According to Belshe, BitGo does not rehypothecate, lend, or commingle client assets, maintaining strict 1:1 custody standards.

For self-custody, BitGo provides wallets with 2-of-3 Multi-Sig or MPC threshold security. Clients retain two keys while BitGo holds one for co-signing, enabling policy controls without compromising autonomy.

Together with the third-party trust, these options are consolidated on a single dashboard, providing clients with full transparency, flexibility, and control across various custody models.

BitGo Aligns with SEC Questions While Offering Full Custody Flexibility

BitGo also addresses the seven questions the SEC recommends investors ask when selecting a custodian. These include:

• Background verification
• Asset coverage
• Storage protocols
• Use of assets
• Privacy protections, and
• Fee structures.

By answering these questions, BitGo demonstrates that institutions can manage their crypto assets securely, compliantly, and efficiently.

As regulators increasingly scrutinize crypto custody, BitGo’s model sets a new industry benchmark: one that combines compliance, operational control, and insurance coverage on a unified platform.

Belshe’s assertion highlights the growing demand from institutions seeking both the security of qualified custody and the autonomy of self-custody. Such a combination was previously unavailable in a single interface.

The assertions come only days after BitGo received a conditional approval to become a national trust bank. Others include Ripple, Fidelity Digital Assets, and Paxos.

In a sector where asset security and regulatory compliance often conflict, BitGo’s hybrid model may represent the next evolution of institutional crypto custody.