Crypto firms are escaping state regulators under Trump

OCC Opens Federal Door for Crypto Firms

The Office of the Comptroller of the Currency (OCC) has reinterpreted federal banking rules to offer crypto companies a path out of state-level oversight, granting national trust charter bank licenses that carry immunity from many state regulations. The move, reported by ICIJ, has drawn sharp criticism from consumer advocates and the traditional banking industry alike.

The OCC conditionally approved conversions from state trust companies to national trust banks for BitGo Bank and Trust, Fidelity Digital Assets, and Paxos Trust Company, alongside two de novo charters for First National Digital Currency Bank and Ripple National Trust Bank. Coinbase has also applied for a federal charter, with Bridge (owned by Stripe) and Crypto.com among other firms that have filed applications to become federally chartered banks.

A national bank charter can convey significant advantages, including the preemption of state banking laws in certain areas, access to the Federal Reserve payments system, and the license of federal supervision. However, national trust bank charters do not allow firms to take deposits, offer checking or savings accounts, or access FDIC insurance.

State Regulators and Banks Push Back

The shift is already producing friction at the state level. Coinbase had specifically asked federal authorities to intervene against Maine's anti-scam wallet verification rule, a move that illustrated how a federal charter can be used to challenge individual state consumer protection measures. Maine regulator Linda Conti put it bluntly: "Consumers do not even know this is coming."

Paxos's trajectory illustrates the stakes. On August 7, 2025, the NYDFS announced a $48.5 million settlement with Paxos Trust Company, concluding a multi-year investigation into the company's AML and due diligence practices.The NYDFS found that Paxos failed to conduct sufficient due diligence of its former partner, Binance, and had systemic failures in its anti-money laundering program. Months after that settlement, Paxos shed its New York state license in favor of a federal charter.

The traditional banking sector is equally alarmed. The Bank Policy Institute asserted that the OCC's action "leaves substantial unanswered questions," including whether the requirements outlined for applicants are appropriately tailored to the activities and risks in which the trusts will engage. The group signaled in March that it was considering legal action against the OCC over the move.

Banking trade groups have expressed concerns about charter arbitrage and the potential for trust banks to engage in bank-like functions without being subject to the full prudential regime applicable to federally insured depository institutions. Meanwhile, the Trump administration has been broadly supportive of integrating digital assets into the traditional financial system.

Sources:
OCC official press release on conditional national trust bank charter approvals
NYDFS press release on $48.5 million Paxos settlement
Axios: OCC conditionally approves 5 crypto firms for national trust bank charters