A commerce group representing hundreds of neighborhood banks throughout the US has filed a federal lawsuit towards the Workplace of the Comptroller of the Foreign money, arguing that the regulator has overstepped its statutory authority by granting nationwide belief financial institution charters to cryptocurrency corporations. The Impartial Community Bankers of America introduced the case Friday within the U.S. District Court docket for the District of Columbia, asking the courtroom to invalidate the OCC’s March 2026 chartering rule, its 2021 Interpretive Letter No. 1176, and the conditional approval granted to digital asset agency Protego Holdings Corp.
The lawsuit, filed below the Administrative Process Act, marks some of the direct authorized challenges but to the regulatory pathway that crypto corporations have used to achieve a foothold within the federal banking system. At its core, the grievance argues that Congress approved the OCC to constitution limited-purpose belief banks to carry out fiduciary capabilities — to not permit non-depository corporations to conduct substantial non-fiduciary companies corresponding to crypto buying and selling, lending, and asset administration below a nationwide financial institution constitution.
The Core Authorized Argument
ICBA contends that the OCC has “far exceeded its restricted statutory authority to constitution belief banks that carry out fiduciary actions.” The group says the regulator’s framework lets entities engaged in what it calls “extremely dangerous cryptocurrency and digital belongings actions” enter the banking system by way of a nationwide belief constitution slightly than a extra strictly regulated conventional financial institution constitution.
The grievance states that the OCC has accredited or conditionally accredited 21 nationwide belief banks below the disputed framework, a minimum of 13 of which ICBA identifies as crypto corporations. These establishments, the group argues, can compete nationally whereas avoiding obligations that apply to insured business banks — together with Community Reinvestment Act necessities, consolidated supervision, capital and liquidity requirements, and FDIC insurance coverage protection.
“Congress didn’t create the nationwide belief constitution as a facet door into the banking system for crypto corporations in search of the credibility of a federal financial institution constitution,” ICBA President and CEO Rebeca Romero Rainey stated in a assertion. She added that digital belongings held at a crypto agency below a nationwide belief constitution “don’t carry these necessary safeguards,” and that the group is asking the courtroom to “return the OCC to its statutory limits.”
An OCC spokesperson declined to touch upon the litigation.
Protego because the Take a look at Case
Whereas the lawsuit assaults the broader OCC framework, it individually asks the courtroom to vacate Protego’s conditional approval. The grievance singles out the digital asset agency, which presents custody, buying and selling, lending, and issuance providers, for example of why the OCC’s interpretation stretches the nationwide belief construction past what Congress supposed.
ICBA notes that Protego laid off most of its workforce in 2023 and confronted vendor lawsuits over unpaid payments. The OCC’s February 13 approval letter issues Nationwide Digital Trust Firm, a proposed Protego Holdings subsidiary. Underneath that preliminary approval, prospects would have the ability to commerce custodied belongings and take part in lending and borrowing preparations, whereas one other platform would assist customer-directed token issuance.
The approval carries situations. Throughout its first three years of operation, the proposed financial institution should preserve a minimum of $15 million in tier 1 capital. It should maintain the larger of half its tier 1 capital or $7.5 million in eligible liquid belongings, plus a separate quantity masking 180 days of working bills. The February letter grants solely preliminary conditional approval; the proposed financial institution should fulfill preopening necessities and acquire ultimate authorization earlier than starting enterprise.
The OCC’s Place
The OCC has taken the alternative authorized place. Its March ultimate rule states that nationwide belief banks might conduct non-fiduciary actions which can be a part of the operations of a belief firm and actions associated to these operations. The company stated the rule clarified longstanding authority slightly than increasing or lowering its chartering powers.
OCC Comptroller Jonathan Gould has reported that over the previous 18 months, the company obtained 40 functions for brand new financial institution charters, together with 23 associated to digital asset corporations — a determine roughly eight instances greater than the prior 4 years.
| Interval | Whole Constitution Purposes | Digital Asset Purposes |
|---|---|---|
| Previous 18 months | 40 | 23 |
| Earlier 4 years | ~5 | ~3 |
The surge displays a broader push by crypto corporations to acquire federal supervision. In December 2025, the OCC conditionally accredited functions involving Ripple, Circle, BitGo, Constancy Digital Belongings, and Paxos. Newer approvals have included Bastion, Coinbase, and Crypto.com. World Liberty Monetary, the agency partly owned by President Donald Trump and his household, additionally obtained a constitution approval that drew criticism from Democratic Senator Elizabeth Warren.
Warren has questioned the OCC’s chartering method in a Might letter, arguing that some actions carried out by these corporations might not fall below the standard capabilities permitted to belief corporations. She accused the company of allowing presidential corruption, posting on X that the World Liberty Monetary constitution was “giving him and his household a new approach to revenue.”
What Trust Charters Do and Do not Do
Nationwide belief banks are federally chartered and supervised by the OCC, however the crypto-focused buildings at challenge typically don’t settle for standard deposits or make business loans. Their digital belongings aren’t protected by FDIC deposit insurance coverage — a distinction that’s central to either side of the dispute.
Crypto corporations worth the construction as a result of it might probably present federal supervision for custody, stablecoins, and associated infrastructure with out turning them into standard deposit-taking banks. Banking teams argue that the identical construction permits crypto corporations to compete for belongings and monetary relationships with out bearing equal regulatory prices.
The FDIC explicitly excludes crypto belongings from deposit insurance coverage. Holding Bitcoin with a federally chartered custodian subsequently doesn’t give it the safety out there to an eligible money deposit at an FDIC-insured establishment. A buyer inserting $10,000 price of Bitcoin with such a custodian nonetheless holds crypto, slightly than an insured greenback deposit. Their rights to get better these belongings if the custodian fails depend upon relevant regulation and custody preparations — the constitution alone doesn’t set up these restoration rights or present FDIC protection.
Broader Implications
The lawsuit lands at a second when crypto corporations have more and more pursued regulated standing by way of established banking channels. The trade’s pursuit of nationwide belief charters has been credited by banking regulators for representing a resurgence in new banking names after a prolonged drought.
If the courtroom agrees with ICBA, the end result may have an effect on the regulatory technique of a number of custody, stablecoin, and digital asset infrastructure suppliers in search of a single federal constitution. A ruling towards the rule or interpretive letter may have an effect on the authorized foundation for different functions utilizing the identical method. A call confined to Protego’s approval would have a narrower attain.
The case additionally arrives because the OCC continues processing functions in 2026, with corporations together with Coinbase, Crypto.com, Block, and Zerohash in search of or receiving various phases of approval. Final month, the OCC granted a full-fledged nationwide financial institution constitution to OpenReserve Financial institution, a blockchain financial institution funded by a number of crypto buyers, together with Andreessen Horowitz, Leap Capital, and Coinbase Ventures.
For neighborhood banks, the alleged mismatch between constitution privileges and banking safeguards is the center of the aggressive and regulatory concern. For crypto corporations, the nationwide belief constitution has change into a key route into federal banking supervision — and the case now places that route below direct authorized scrutiny.
Submitting the case doesn’t itself revoke a constitution. The implications would depend upon which requests, if any, the courtroom grants. Till the courtroom addresses ICBA’s claims, candidates face a new layer of authorized uncertainty even because the OCC continues supervising and processing digital asset constitution functions.
