Fed, FDIC & OCC Clarify Crypto Banking Rules

In a joint statement released on Monday, the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) provided clarity on how existing rules apply to banks managing cryptocurrencies on behalf of their customers. This announcement is a part of ongoing efforts by regulators to define the regulatory framework as the crypto industry grows. The agencies highlighted the importance of safety in handling crypto-assets and stated that this guidance does not introduce any new supervisory expectations. They urged banking organizations to assess the risks associated with crypto, similar to other new products and services. This includes addressing cybersecurity threats and ensuring the proper management of keys and sensitive data. "Banking organizations considering the safekeeping of crypto-assets must acknowledge the dynamic nature of the crypto market and implement a risk governance framework that adapts to relevant risks," the agencies advised. Over recent months, particularly since the Trump administration began, several federal agencies have released clarifications regarding their positions on crypto regulation. For instance, the OCC indicated in May that U.S. banks are allowed to buy and sell crypto on their own behalf. Simultaneously, the FDIC has altered its position, enabling financial institutions to conduct crypto-related activities without prior notification to the agency. Additionally, crypto advocates have taken leadership roles in key federal agencies. Last week, the Senate confirmed Jonathan Gould, a former blockchain executive, to lead the OCC. Gould, who was the chief legal officer at Bitfury, has extensive experience in the crypto sector. Disclaimer: The Block maintains its independence while providing news, research, and data. As of November 2023, Foresight Ventures is a majority investor in The Block and invests in other companies in the crypto space. All information here is for informational purposes only and does not constitute legal or financial advice.