BNY and BlackRock funnel billions through one infrastructure provider, exposing the fragile illusion of crypto diversification

BNY's Digital Asset Custody platform plans to provide institutional crypto staking support through Galaxy's infrastructure, the two firms said Aug. 4.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 validator firms approved to stake Ethereum for BlackRock's iShares Staked Ethereum Trust (ETHB). The prospectus says the fund can stake 70% to 95% of its holdings under normal conditions.Two of Wall Street's largest names now route institutional crypto staking through the same infrastructure provider. Galaxy also runs staking for Solana and other proof-of-stake networks, extending that overlap across multiple chains.How institutional crypto staking separates ownership from controlETHB owns the ETH and collects the crypto staking rewards, and its custodian holds the private keys and controls withdrawals.Galaxy and the other approved validators hold the validator keys and perform the validation work, but the prospectus is explicit that they never gain the keys needed to move the trust's staked ETH themselves.That structure is safer than handing tokens to a validator, but the shareh...