Community Banks Challenge Crypto Trust Charters

A US banking trade group has filed a lawsuit against the country’s primary bank regulator, challenging its decision to allow cryptocurrency firms to obtain national trust bank charters.

The Independent Community Bankers of America (ICBA), which represents banks typically holding less than $10bn in assets, filed the case on October 2 in the US District Court for the District of Columbia.

The lawsuit targets the Office of the Comptroller of the Currency (OCC), calling for it to revoke a recent rule and related guidance that make it easier for crypto businesses to apply for national trust bank charters. The ICBA argues the regulator has exceeded its statutory authority by extending these charters to firms conducting activities beyond traditional trust services.

The case comes amid tensions between traditional banks and the crypto industry over access to the US financial system.

According to ICBA president and CEO Rebeca Romero Rainey, consumers could assume that federally chartered institutions offer the same protections as conventional banks, despite differences in the safeguards applying to crypto firms.

“Any non-fiduciary firm seeking the benefits of a federal bank charter should meet the same standards as community banks,” she said in a statement, amid concerns over regulatory safeguards.

The group argues that crypto firms operating under trust charters are not subject to equivalent requirements covering capital, liquidity, regulatory supervision and Federal Deposit Insurance Corporation (FDIC) insurance.

The OCC, which has declined to comment on the litigation, has approved several such charters under President Donald Trump’s administration. They allow firms to hold and manage customer assets and facilitate payments, but do not permit them to accept cash deposits or make loans.