U.S. Senator Elizabeth Warren is demanding the agency that regulates national banks explain its chartering of nine crypto-focused institutions, which she argued didn’t meet federal regulations and constitute a risk to the financial system.
The U.S. Office of the Comptroller of the Currency has granted trust charters to a series of banks as the agency embraced President Donald Trump’s agenda to elevate the crypto sector and establish a friendly regulatory environment. Now Warren, the ranking Democrat on the Senate Banking Committee, sent a letter to OCC chief Jonathan Gould, calling for an explanation of approvals for trusts belonging to such companies as Coinbase, Paxos, Ripple, BitGo and Fidelity Digital Asset Services.
“These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank,” Warren, who has criticized Gould’s decision previously in hearings, wrote in the letter. “Your decision to facilitate this regulatory arbitrage not only conflicts with federal law, it also poses serious risks to consumers, the safety and soundness of the banking system, and the separation of banking and commerce.”
The OCC didn’t immediately respond to a request for comment on Warren’s letter.
The senator pointed out the crypto companies are avoiding the process to be approved as highly regulated, full-service national banks and taking the narrower trust-bank charters, even though she argues they “look like crypto banks, not trust companies.”
“The business plans include language that suggests the companies intend to engage in non-fiduciary custodial activities, facilitating payments and lending activities, and conducting stablecoin activities closely related to deposit-taking,” she wrote.
Among her requests for information on the OCC process, she asked for records of any communications between the agency and President Donald Trump or his family members on chartering firms.
The Massachusetts lawmaker has repeatedly criticized the pending charter track for World Liberty Financial Inc., the crypto company that Trump and his family hold a stake in.