Crypto.com’s parent company, Foris DAX, has secured conditional approval from the Office of the Comptroller of the Currency (OCC) to operate a national trust bank geared towards cryptocurrency. This development marks a significant advancement for the platform, which announced the approval on Monday, highlighting that it is one step closer to fulfilling the evolving needs of institutional clients looking for robust custodial solutions.
The OCC’s approval allows Foris DAX National Trust Bank, a wholly owned subsidiary of Foris Holdings, to operate under the name Crypto.com National Trust Bank, but full operational capabilities hinge on meeting the conditions set forth by the OCC. In a statement, Kris Marszalek, co-founder and CEO of Crypto.com, noted that this milestone aligns with the necessity for a qualified custodian backed by federal oversight, presenting a consolidated solution for institutions.
This move comes amidst a notable wave of activity among cryptocurrency and financial technology (fintech) firms seeking national trust bank charters. According to Pitchbook analyst Rudy Yang, the past year has seen a surge in charter applications as firms recognize a critical “now-or-never moment” in the regulatory landscape under the current administration. Other prominent crypto firms, including Coinbase and World Liberty Financial, have pending applications for similar charters, indicating a robust trend in the sector.
The context for these charters dates back to interpretive letter 1176 issued by former general counsel Jonathan Gould, which authorizes firms with trust charters to engage in non-fiduciary activities such as asset custody. This regulatory framework is pivotal for custody providers and stablecoin issuers, as it clarifies their standing and supports the secure management of digital assets.
While this conditional approval is a significant development, it will not affect Crypto.com’s status as a qualified custodian under the New Hampshire Banking Department’s regulation. The exchange has also been strategically aligning itself within the fintech ecosystem, having recently partnered with Stripe to enable merchants to accept crypto payments via both platforms.
However, the company has faced its share of challenges. Last year, it entered litigation against the Nevada Gaming Control Board concerning a cease-and-desist order impacting its prediction markets division. In this complex legal landscape, Commodities and Futures Trading Commission Chairman Michael Selig extended support to Crypto.com, advocating for the company’s interests through a friend-of-the-court brief. Selig emphasized the need for regulatory clarity and protection against state-level constraints threatening the development of innovative financial products.
As the cryptocurrency landscape continues to mature, the approval for a national trust bank charter positions Crypto.com to capitalize on growing institutional interest and regulatory clarity, suggesting more applications from crypto firms are imminent in response to favorable conditions in the regulatory environment.
