Senator Elizabeth Warren has formally challenged the Office of the Comptroller of the Currency over nine national trust bank charters approved for crypto companies, claiming the OCC exceeded its legal authority under the National Bank Act. The challenge targets approvals granted to Ripple, Circle, BitGo, Fidelity, and Paxos in December, along with conditional approvals for Coinbase and filings from Payward (Kraken’s parent). Warren argues the charters enable crypto firms to conduct banking activities without equivalent regulatory safeguards, potentially allowing expansion into lending, payments, and trading platforms beyond their original custody scope.
How Crypto Firms Obtained Trust Charters
National trust charters permit companies to manage and hold customer assets, accelerating settlement timelines and reducing counterparty risk. The OCC, led by Comptroller Jonathan Gould, approved nine such charters for crypto entities throughout the past year, framing the decisions as modernization efforts. Gould stated that “bringing new entrants into the federal banking system could improve competition and deliver additional products and services.” Warren’s letter contends these approvals contradict the National Bank Act, which restricts trust activities to a “narrow set” of permitted functions. Traditional banks have also raised objections to the OCC’s approach, citing competitive concerns and regulatory inconsistency.
Warren’s Legal and Regulatory Objections
Warren describes the approvals as an “apparent violation of the National Bank Act” and argues crypto firms “appear to go far beyond the narrow set of activities permitted by law.” Her core concern centers on crypto companies engaging in banking without “the same regulations and safeguards” applied to traditional financial institutions. The $2.5 trillion crypto market cap suggests meaningful systemic exposure, amplifying regulatory pressure. Warren’s challenge questions whether the OCC possesses statutory authority to grant charters to entities intending to offer services beyond custodial functions. The letter represents escalating Congressional oversight of the OCC’s crypto licensing strategy and signals potential legislative action to constrain future approvals.
Implications for Crypto Infrastructure and Regulation
The dispute reflects a fundamental disagreement over crypto custody infrastructure. National trust charters streamline asset management for institutional players and reduce settlement friction—key infrastructure improvements for mainstream adoption. However, they also create regulatory arbitrage if crypto firms exploit charter privileges to offer broader financial services. A formal OCC response to Warren’s allegations has not been reported. The outcome will shape whether crypto custody remains confined to custodial functions or expands into full banking services. Traditional banks view the charters as competitive threats; crypto firms view them as essential infrastructure upgrades. Resolution of Warren’s challenge will determine the regulatory ceiling for crypto institutional finance.
What Happens Next
Warren’s letter initiates a formal challenge to OCC authority, though the mechanism for resolution remains unclear. Potential outcomes include an OCC response defending the approvals, Congressional hearings, or litigation contesting charter validity. Pending applications from Payward and other firms may face heightened scrutiny. The resolution will set precedent for whether the OCC can continue issuing charters to crypto entities or faces statutory constraints requiring legislative clarification of the National Bank Act.
