Federal trust charters shield crypto firms—but tie them to Washington oversight
In brief
- Silvergate's former CEO blamed political pressure, not insolvency, for the bank's liquidation after losing 70% of deposits
- Federal trust charters provide legal custody frameworks but create direct supervisory ties to Washington regulators
- OCC conditionally approved charters for Ripple, Circle, and Coinbase; pending applications from Zerohash and others
The Silvergate precedent
Silvergate's former CEO Alan Lane says the crypto-focused bank survived withdrawals of roughly 70% of its demand deposits before political pressure drove it to choose liquidation. Lane blamed the former President Joe Biden administration for making continued operations untenable in his September 8 account.
The Federal Reserve's inspector general offered a different reading. It attributed the liquidation to concentration in crypto-industry depositors, rapid growth and funding risks, alongside significant weaknesses in governance and risk management. The Fed confirmed in July 2024 that Silvergate had completed its liquidation, repaid all customer deposits and ceased functioning as a bank.
The Fed separately fined Silvergate $43 million for anti-money-laundering noncompliance.
What a federal trust charter actually means
Federal trust charters give companies an established legal framework for custody and create a direct supervisory relationship with Washington. The OCC—the Office of the Comptroller of the Currency—oversees these institutions. That oversight can cut both ways. Regulators provide clarity and legitimacy. They also control the rules.
In November 2021, the OCC imposed a written non-objection process for specified crypto activities. On March 7, 2025, the agency rescinded that process and withdrew from two 2023 interagency crypto-risk statements as they applied to its banks. A single regulatory pivot can shift the ground beneath these institutions.
The new wave of approvals
Despite the Silvergate cautionary tale, the OCC is moving forward. The OCC's December 2025 decisions conditionally approved new trust-bank applications for Ripple and Circle's proposed First National Digital Currency Bank. Circle announced final approval on July 10 for the institution operating as Circle National Trust.
Coinbase's April 2 decision granted preliminary conditional approval for fiduciary digital asset custody and related services. The OCC's pending application list includes Zerohash's August 19 application and earlier 2026 submissions from Payward National Trust Company, Agora National Trust Bank, and EDX Trust. The OCC's December 2025 decisions also approved conversions for BitGo, Fidelity Digital Assets and Paxos.
The question isn't whether crypto companies can get federal charters. It's whether the charter itself insulates them from the political winds that buffeted Silvergate—or simply locks them into a system where regulatory change can be swift and unforgiving.
Frequently asked questions
What is a federal trust charter in crypto?
A federal trust charter gives crypto companies an established legal framework for custody (safeguarding customer assets) and creates a direct supervisory relationship with the OCC, the Office of the Comptroller of the Currency. This oversight provides legitimacy but also means regulatory changes can affect operations quickly.
Why did Silvergate fail despite being federally chartered?
Silvergate's former CEO blamed political pressure from the Biden administration for the liquidation, though the Fed's inspector general cited concentration in crypto deposits, rapid growth, funding risks, and governance weaknesses. The bank remained solvent but chose to liquidate.
Which crypto companies now have federal trust charters?
Circle received final approval in July 2025 for Circle National Trust. Ripple has conditional approval. Coinbase received preliminary conditional approval. BitGo, Fidelity Digital Assets, and Paxos also received approvals in December 2025.
