The last few weeks have seen a significant ramp-up of federal bank regulators’ focus on cryptocurrency companies and their disclosures regarding FDIC deposit insurance, signaling a potential spike in enforcement actions targeted at the crypto sector.
Continue Reading FDIC Issues Cease and Desist Letters to Companies for Crypto-Related Representations About Deposit Insurance

On January 4, 2020, the Office of the Comptroller of the Currency (“OCC”) published an interpretive letter (the “Letter”) clarifying that national banks and federal savings associations (“banks”) may engage in and facilitate payment activities through new technological means, including serving as a node in a distributed ledger system such as those utilized by some stablecoins, facilitating customer conversion of fiat currency to or from digital currencies, and issuing stablecoins.

The Letter reasons that payment services are a core banking function, and that independent node verification networks (“INVNs”) and stablecoins are merely new means of effecting pre-existing permissible bank activities.

The letter follows other recent actions by former Acting Comptroller of the Currency Brian Brooks to clarify the authority of national banks to engage in certain digital asset activities, including the issuance of two other interpretive letters last year clarifying permissible cryptocurrency-related activities for banks (custodying digital assets and holding certain stablecoin reserves).  The Acting Comptroller, whose resignation became effective today, also spearheaded an initiative to grant national bank and national trust bank charters to fintech companies.

The Letter notes that banks “should consult with OCC supervisors, as appropriate, prior to engaging in these activities.”  This guidance, OCC precedents in expanding permissible bank activities, and the controversy surrounding recent crypto-related charter applications may lead to a deliberative approach by the OCC to banks expanding into these activities.
Continue Reading OCC Affirms Authority of National Banks to Engage in Additional Cryptocurrency-Related Activities, Including Issuing Stablecoins

On December 2, 2016, Comptroller Thomas J. Curry of the Office of the Comptroller of the Currency (“OCC”) announced that the OCC will move forward with chartering financial technology (“FinTech”) companies that offer bank products and services and meet the OCC’s chartering requirements. However, while encouraging, the announcement, and the OCC paper released with it, left many issues unresolved.

Continue Reading The OCC’s New FinTech National Banking Charter