Regulator Confirms US Banks Can Legally Hold Clients’ Crypto Assets in Custody
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On May 7, Acting Comptroller Rodney Hood of the U.S. Office of the Comptroller of the Currency (OCC) issued an interpretive letter, authorizing national banks and federal savings associations to buy and sell crypto assets they hold for customers.
In a news release, the OCC clarified that these institutions may outsource the underlying operations–from custody and execution to settlement and tax reporting— as long as they maintain established third-party risk controls.
https://x.com/USOCC/status/1920180546837053516
Industry Experts React to Crypto Asset Framework for Banks and Financial Institutions
The Interpretive Letter 1184 removes a lingering gray area. Earlier OCC letters treated safekeeping of private keys as a modern form of custody, but never said banks could execute trades or rely on sub-custodians.
The new letter closes that gap, giving lenders a full legal basis to fold services on crypto assets into ordinary banking business.
Rodney Hood noted that over 50 million Americans already hold crypto assets, and that the banking system should be allowed to match the digital transformation of financial services “in a safe, sound and lawful manner.”
Industry voices have welcomed the change.
StarkWare GC Katherine Kirkpatrick Bos said in an X post that it lets banks re-enter crypto without existential regulatory risk.
Coinbase policy chief Faryar Shirzad was another voice who hailed the clearer guidance.
The Letter also stated that financial institutions must still observe fiduciary rules in Parts 9 or 150 when acting as trustees, ensuring that every crypto activity, whether handled directly or by a vendor, remains subject to consumer protection and anti-money-laundering law.
However, they no longer need a separate OCC sign-off before launching these services, a procedural hurdle the agency scrapped in March when it rescinded earlier restrictive bulletins.
With guardrails in place, regulated institutions can launch trading desks and fold crypto reporting into standard statements, meeting client demand within trusted compliance frameworks.
Regulators Unite to Balance Crypto Asset Innovation and Safety in U.S.
Federal banking regulators in the U.S. are steadily easing restrictions on cryptocurrency.
On April 24, the Federal Reserve Board rescinded its 2022 and 2023 directives that forced state-member banks to seek advance clearance for crypto and dollar-token activity, shifting oversight to routine examinations instead.
https://twitter.com/AngelofYHVH/status/1915533968503410721
The Fed simultaneously joined the FDIC in withdrawing from two 2023 joint statements that had warned institutions away from digital-asset business.
The rollback signals a softer regulatory posture and foreshadows new guidance designed to foster responsible innovation across the U.S. banking sector.
Despite its softer stance on cryptocurrency, regulators remain resolute in targeting rule-breakers and dubious organizations.
On May 1, the FinCEN restricted the Huione Group from the U.S. banking system, invoking Section 311 of the Patriot Act after tracing roughly $4 billion in illicit flows through the Cambodian conglomerate since 2021.
The proposed rule bars banks from opening or maintaining correspondent or payable-through accounts linked to Huione and its affiliates.
As the U.S. strives to establish its status as the world’s crypto capital, it must continue to show that it can strike the right balance between innovation and safety when dealing with crypto assets.
