Do federal trust charters shield crypto from regulators?

Alan Lane, Silvergate’s former chief executive, wrote on Sept. 8 that the bank remained “solvent and liquid” after losing roughly 70% of its demand deposits and that political and regulatory pressure led to the decision to liquidate on March 8, 2023.

The Federal Reserve’s inspector general in September 2023 attributed the wind-down to concentrated crypto-industry deposits, rapid growth and funding risks, and significant weaknesses in governance and risk management. The Federal Reserve confirmed in July 2024 that Silvergate completed its liquidation, repaid customer deposits and ceased operating as a bank, and regulators fined the firm $43 million for anti-money-laundering shortcomings.

The Office of the Comptroller of the Currency has approved several national trust charters and conditional applications for crypto custody businesses. On Dec. 12, 2025 the OCC granted conditional approvals for new or converted national trust banks for Ripple, BitGo, Fidelity Digital Assets and Paxos. Coinbase received preliminary conditional approval for a national trust charter on April 2, 2026. Circle received final approval for Circle National Trust on July 10, 2026. Other applicants, including Zerohash, Payward, Agora and EDX Trust, filed applications through 2026.

National trust charters provide a legal framework for fiduciary custody and asset safeguarding and place custody businesses under OCC supervision. Many proposed trust institutions would not be insured depository institutions; fiat held in custody would be kept in for-benefit-of accounts at third-party banks.

The OCC can impose conditions on approvals, require capital and liquidity standards, and limit permitted activities. The agency may modify, suspend or rescind preliminary approvals before final chartering. Significant business-plan changes during organization and the first three operating years require advance notice and written non-objection.

On March 7, 2025 the OCC rescinded a written non-objection process that had required banks to clear certain crypto activities with supervisors. An OCC and FDIC rule effective June 9 bars agencies from taking adverse supervisory action based solely on reputation concerns. A related rule published Sept. 1 takes effect Nov. 2 and narrows reputational grounds while preserving actions tied to safety, soundness and legal compliance.

In preliminary findings released in December 2025 the OCC reported that nine large national banks had imposed inappropriate restrictions or enhanced approval requirements for lawful business sectors, including digital assets, during 2020–2023.

Federal law provides judicial review of agency actions. The Administrative Procedure Act allows courts to set aside agency decisions found unlawful or arbitrary. A statutory forfeiture route under 12 U.S.C. 93(a) requires specified violations and a court determination. A national trust charter creates a direct supervisory relationship with the OCC and maintains operational links to correspondent banks for cash management.