Crypto firms pursue federal trust‑bank charters amid questions of protection and control
Event overview
Crypto companies are obtaining federal trust‑bank charters that place their custody businesses under the Office of the Comptroller of the Currency (OCC). The move follows the liquidation of Silvergate Bank, which its former CEO says was driven by political pressure rather than a lack of liquidity.
Key points
- Trust‑bank charters give crypto firms a legal framework for safeguarding customer assets and put them under direct OCC supervision.
- Charters still require firms to rely on third‑party banks for fiat cash, creating a potential choke point.
- Silvergate’s former CEO Alan Lane attributes the bank’s March 8 2023 liquidation to political and regulatory pressure, despite the bank being solvent after 70 % deposit withdrawals.
- The Federal Reserve’s inspector general cited deposit concentration, rapid growth, funding risks, and governance weaknesses as reasons for Silvergate’s failure.
- OCC approvals in December 2025 and 2026 include Ripple, Circle, BitGo, Fidelity Digital Assets, Paxos, and Coinbase, with several pending applications.
Lane’s claim
Alan Lane, former Silvergate CEO, wrote on Sept 8 that the Biden administration’s pressure made continued operation untenable, forcing the bank to announce liquidation on March 8 2023. He says the bank remained “solvent and liquid” after the withdrawals.
Federal Reserve findings
The Fed’s inspector general report (Sept 2023) attributed Silvergate’s liquidation to a concentration of crypto‑industry depositors, rapid growth, funding risks, and governance weaknesses. The Fed confirmed the bank’s liquidation in July 2024, noting that all customer deposits were repaid and that Silvergate was fined $43 million for anti‑money‑laundering non‑compliance.
OCC trust‑bank approvals
In Dec 2025 the OCC conditionally approved trust‑bank applications for Ripple and Circle’s proposed First National Digital Currency Bank, as well as conversions for BitGo, Fidelity Digital Assets, and Paxos. Circle announced final approval on July 10 2026 for Circle National Trust. Coinbase received preliminary conditional approval on April 2 2026 for a fiduciary digital‑asset custody entity that will hold fiat cash at third‑party banks. Pending applications include Zerohash, Payward National Trust Company, Agora National Trust Bank, and EDX Trust.
Why it matters
Moving to a federal trust‑bank charter shifts risk from deposit‑run exposure to custody‑related compliance and the reliability of partner banks. The OCC’s direct supervision replaces earlier Fed oversight, but supervisors can still impose activity restrictions and examiner conditions.
What’s next
Several crypto firms have pending applications for trust‑bank charters, indicating a broader industry shift toward federally supervised custody structures. Future regulatory guidance and examiner decisions will shape how these entities operate.
