The three major federal banking regulators in the United States—the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC)—have issued a joint statement outlining how existing rules will be implemented regarding banks offering cryptocurrency custody services on behalf of their customers. This statement aims to reduce uncertainty about how banks can participate in the crypto sector. In the joint statement, the regulators detailed how the existing legal framework and risk management principles would apply to crypto asset custody activities, while emphasizing that no new auditing standards were introduced. “Banking institutions considering crypto asset storage should take into account the evolving nature of these markets and the technology they are based on, and create an appropriate risk management framework,” it said. According to the statement, banks offering crypto asset custody services will be responsible for keeping digital assets secure on behalf of customers, and in this process, they will need to prioritize issues such as the protection of digital keys, cybersecurity risks, and operational controls. Related News: There is a New Development About Terra (LUNA) Founder Do Kwon - The Phrase “Productive Discussions” is Used for the First Time - Here are the Details The statement noted that storing crypto assets requires significant resources and expertise due to factors such as the complexity of the technology involved, market volatility, and rapid change. It added that banks must conduct comprehensive risk assessments and possess sufficient technical capacity before offering this service. Crypto assets can be held in both “fiduciary” and “non-fiduciary” capacities. Banks are required to comply with relevant federal regulations (e.g., 12 CFR 9 or 150) and state laws when acting as trustees, executors, or investment advisors. Since Donald Trump's re-inauguration, there has been a noticeable increase in statements and positions regarding crypto regulations. In May, the OCC announced that US banks could trade crypto assets on their own behalf. The FDIC, on the other hand, lifted the previously mandatory prior notification requirement, allowing banks to more freely participate in crypto activities. Following these regulatory announcements, the appointment of pro-crypto figures to the helm of critical institutions is also attracting attention. Last week, the Senate confirmed the appointment of former blockchain executive Jonathan Gould to head the OCC. Gould previously served as general counsel at Bitfury and held senior positions at the OCC. *This is not investment advice. Continue Reading: FED, FDIC and OCC Issue Joint Statement on Cryptocurrencies
