Crypto.com Wins Conditional Approval for US Banking Charter

Crypto.com says it has gotten conditional governmental approval for a bank charter.

The conditional approval from the Office of the Comptroller of the Currency (OCC) allows the digital assets company to charter Foris Dax National Trust Bank, doing business as Crypto.com National Trust Bank, Crypto.com announced Monday (Feb. 23).

“With this conditional approval, Crypto.com clears a major milestone in the process to provide its industry-leading custodial services … as a federally regulated institution and further establishing Crypto.com as the qualified custodian of choice,” the company said in a news release.

“Once fully approved, Crypto.com National Trust Bank will operate as a federally regulated national trust bank subject to OCC oversight.”

The company submitted its application to the OCC in October of last year. Kris Marszalek, Crypto.com’s co-founder and CEO, called the conditional approval the result of the company’s commitment to compliance.

“This milestone brings us a major step closer to meeting leading institutions’ needs for a one-stop-shop qualified custodian under a gold standard of federal oversight,” he added.

The release notes that the conditional approval has no bearing on Crypto.com Custody Trust Company’s operations and client services as a qualified custodian regulated by the New Hampshire Banking Department as a non-depository trust company.

The approval follows the OCC’s granting of conditional bank charters late last year from several companies in the digital asset space, including Circle, Ripple and BitGo.

What makes the moment stand out, PYMNTS noted at the time, is not the issuance of new charters, considering that the federal banking system already includes more than 1,000 national banks and federal savings associations.

Rather, it’s that the kind of entities now gaining a foothold under federal oversight are coming from a sector that the federal government had before then kept at arm’s length.

“And while the approvals from the OCC are tied to distinct conditions that the five applicants must satisfy before commencing operations, the signal sent to markets is unmistakable: federal regulators are opening the door to crypto-connected banking under the same statutory framework that governs traditional trust banks,” that report said.

PYMNTS last week examined the trend of FinTechs viewing bank charters as a way to build their businesses, manage compliance and compete in the market.

Regulatory changes have altered the equation for companies that walk the line between technology and financial services, two partners at the law firm Nixon Peabody said in an interview with Competition Policy International, a PYMNTS company.

Momentum is shifting toward “allowing banks to provide core banking services in the digital assets area,” Gregory N. Blase said.