Warren Scrutinizes OCC Over Crypto Trust Charters

Sen. Elizabeth Warren has pressed the Office of the Comptroller of the Currency (OCC) after the agency approved national trust charters linked to Coinbase, Ripple, Bitgo and other digital-asset firms, raising questions about protections for customers whose assets are held by chartered trust entities.

Warren’s inquiry targets a group of charters and charter applications associated with Ripple National Trust Bank, Paxos Trust Company LLC, First National Digital Currency Bank, Fidelity Digital Asset Services, Bitgo Trust Company, Foris DAX National Trust Bank, National Digital Trust Company, Bridge National Trust Bank and Coinbase National Trust Company.

The core issue Warren raised is whether firms that custody digital assets under national trust charters are operating in ways that resemble banks that take deposits and lend, and whether customers of chartered trust entities receive the same federal protections that apply to traditional depository banks.

In an open letter dated May 19, Bitgo Chief Executive Mike Belshe defended the company’s model of fiduciary custody. He wrote that Bitgo does not take deposits, lend customer assets or commingle client property, and that customer assets are held in segregated, bankruptcy-remote accounts subject to fiduciary duties. He wrote: “We do not take deposits. We do not lend customer assets. We do not commingle.”

Belshe argued the phrase “crypto bank” has no single legal meaning and can obscure the distinction between institutions that accept deposits and lend and those that provide custody services only. He noted that national trust banks have historically held non-cash assets such as art, bullion and business interests, and said digital assets fit within that fiduciary framework. Belshe pointed out Bitgo holds a South Dakota state trust charter issued in 2018 and maintains regulatory licenses in New York, Switzerland, Germany, Dubai and Singapore.

On stablecoin reserves, Belshe wrote that Bitgo keeps reserves fully backed and does not engage in maturity transformation or lending of customer funds. He said the company performs auditor-backed reserve attestations twice monthly for stablecoin assets and runs quarterly and annual audits, a frequency he contrasted with standard bank Call Reports. He requested clearer terminology to distinguish institutions that operate fractional reserves from those that hold full reserves and asked Warren to meet with Bitgo staff to review the firm’s practices.

Federal rules that apply to depository banks include deposit insurance, capital requirements, the Community Reinvestment Act and supervision under the Bank Holding Company Act. Those obligations are designed to address risks that arise when institutions borrow from depositors and lend those funds. Belshe argued that custodial trust arrangements that keep assets segregated do not pose the same type of exposure to customer funds.

Warren’s letter asks whether national trust charters for crypto-related entities create supervisory gaps and whether federal regulators should clarify what protections apply to customers of chartered trust companies holding digital assets. The exchange highlights differing views between lawmakers and industry executives over how to classify and oversee firms that custody cryptocurrencies and stablecoin reserves, and whether federal banking charters should be interpreted to cover custody activity. Belshe framed the OCC charter as an extension of federal oversight rather than a way to avoid regulation and said his firm has pursued stronger oversight for the past decade.