Judicial standoff over crypto banking licenses in the United States

Standoff over crypto banking approvals. The Independent Community Bankers of America (ICBA) filed suit against the Office of the Comptroller of the Currency (OCC) in the District of Columbia federal court. The association accuses the regulator of having created a path of access to the banking system for crypto companies without imposing on them all the constraints applied to traditional banks.

The appeal targets interpretative letter No. 1176 and a rule published on March 2, which entered into force on April 1. The ICBA also requests the cancellation of the conditional approval granted to Protego Holdings.

Interpretive Letter No. 1176 dates from January 2021. It states that a national trust bank can carry out certain non-fiduciary activities authorized to trust companies, including the custody of assets. The rule adopted in 2026 enshrined this interpretation in OCC regulations.

ICBA disputes this reading of the National Bank Act. According to her, Congress did not authorize the agency to issue this type of authorization to companies whose activity is mainly based on non-fiduciary services linked to digital assets:

“Congress did not create the national trust charter as a back door into the banking system for crypto businesses seeking the credibility of federal licensing without the obligations that apply to insured depository institutions. »

These establishments do not collect deposits and their customers therefore do not benefit from FDIC insurance. The ICBA also highlights the absence of obligations under the Community Reinvestment Act and the application of capital, liquidity and supervision rules different from those of commercial banks.

The OCC defends an opposite reading. The regulator considers that the law has long authorized it to approve banks limited to the operations of a trust company, including when some of their activities are not strictly fiduciary in nature. The court will therefore have to resolve a disagreement over the extent of the powers that Congress has entrusted to the agency.

The complaint directly targets Protego Holdings, a specialist in the custody, trading, lending and issuance of digital assets. In February 2026, the OCC granted it conditional approval to create National Digital Trust Company.

Protego had already obtained a first conditional authorization in 2021, but this expired before the bank actually opened. The company then laid off a large part of its employees in 2023 and faced several disputes with suppliers over unpaid invoices. The ICBA therefore asked the OCC to reject its new application, citing weaknesses in its governance and control systems.

The file, however, goes beyond the sole case of Protego. Circle, Ripple, Paxos, Fidelity Digital Assets, BitGo and Coinbase also received conditional approvals from the OCC between December 2025 and April 2026. Anchorage Digital already had federal approval since 2021.