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Bank group sues U.S. regulator over granting crypto trust charters
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The Independent Community Bankers of America sued the Office of the Comptroller of the Currency in federal court on Friday, alleging that crypto trust charters exceed its authority. The ICBA said the OCC admits digital firms without community banksâ regulatory obligations. The case tests federal chartering power and competitive fairness.
Representing smaller banks, the ICBA said crypto trusts create a âsevere competitive disadvantage.â It also opposed the Digital Asset Market Clarity Act, which failed in the Senate last month. The group said its stablecoin provisions did not protect banks from deposit competition.
The ICBA said Congress did not create the national trust charter as a back door for crypto firms seeking federal banking credibility. It alleged that trust banks escape capital, liquidity, supervision and FDIC insurance requirements, contrary to the National Bank Act. The lawsuit challenges the OCCâs interpretation of its powers.
The OCC has issued a steady stream of charters, which regulators credit with reviving new bank names after a long drought. Crypto-focused trusts include Protego and Erebor, while Coinbase, Circle and Crypto.com have pursued charters. World Liberty Financial, partly owned by President Donald Trump and his family, was a recent addition.
Crypto trusts generally do not offer cash deposits covered by FDIC insurance. Supporters say they operate differently from traditional community banks. Critics argue that participation in payments still requires uniform oversight.
Bank Policy Institute executive vice president Paige Pidano Paridon supports innovation when institutions face rules comparable to peers. She said trust charters should cover only trust activities; conventional banking requires a full-service charter. She called uniform standards essential to safety, resilience and competition.
The OCC declined to comment on the litigation. A ruling could define the boundary between statutory trust authority and broader banking powers. The outcome may shape future crypto charters and supervision.
