OCC Reiterates Full Scope of Crypto Custody Authority of Banks It Regulates
On May 7, 2025, the Office of the Comptroller of the Currency (“OCC”) issued Interpretative Letter 1184 (“IL 1184”) confirming that national banks and federal savings associations may provide cryptocurrency custody activities. In IL 1184, the OCC also further delineates the scope of this authority and the requirements for institutions to custody customer digital assets.
In this Legal Update, we provide context to IL 1184 and what it means for OCC-regulated institutions and the digital asset sector.
Background
During the first Trump Administration, the OCC had authorized national banks and federal savings associations to engage in certain crypto-asset activities.1 One authorized activity was that national banks may provide cryptocurrency custody services for customers. At that time (July 2020), the OCC stated that cryptocurrency custody services included services such as facilitating cryptocurrency and fiat currency exchange transactions, transaction settlement, trade execution, recordkeeping, valuation, tax services, reporting, or other appropriate services. Further, the OCC stated that a bank acting as custodian could engage a sub-custodian for cryptocurrency it held on behalf of customers.
Under the Biden Administration, federal banking regulators undertook a series of joint efforts to pull back that authorization and narrow the legal authorities applicable to the cryptocurrency activities of supervised institutions beginning in November 2021. However, even then the OCC recognized the validity of the authority to provide cryptocurrency custody services.
Since the Trump Administration has returned to office, the OCC has sought to reverse many of the Biden-area actions on digital assets. In particular, the OCC issued Interpretative Letter 1183 (“IL 1183”), which reaffirmed Interpretative Letter 1170 (“IL 1170). As noted above, IL 1170, which was issued during the first Trump Administration in July 2020, recognized that national banks may provide cryptocurrency custody services. IL 1183, which was issued in March 2025 during the second Trump Administration stated that the crypto-custody activity described in IL 1170 remained permissible for national banks.
IL 1184
In IL 1184, the OCC confirms that OCC-regulated institutions may buy and sell cryptocurrency assets held in custody on a customer’s behalf at the direction of the customer. The OCC reached this determination by referencing Interpretative Letter 1170, which specifically addressed the authority of national banks to provide custody services for customers’ cryptocurrency they custody. The OCC also confirmed that OCC-regulated institutions may use sub-custodians provided they have appropriate third-party risk management practices. In addition, the OCC noted that any cryptocurrency custody activities must still be conducted in a safe and sound manner and in compliance with applicable law.
Looking Ahead
The issuance of IL 1184 is another step by the OCC to embrace President Donald Trump’s fundamental shift in federal policy on digital assets, and is consistent with the actions recently taken by the other federal banking regulators. While banks still will need to incorporate cryptocurrency-related activities in their enterprise-wide risk management programs, particularly with respect to financial crime compliance, there is now clarity at least about the authority of OCC-regulated institutions to provide cryptocurrency custody services.
In the near future, we expect that the OCC will issue guidance that confirms that authority of OCC-regulated institutions to engage in other cryptocurrency-related activities (i.e., beyond those covered OCC guidance document issued in the first Trump Administration). Such guidance may be supplemented through collaboration with other regulators, such as the Financial Crimes Enforcement Network with respect to anti-money laundering compliance for cryptocurrency-related activities.
Finally, one item that was left unaddressed in IL 1184 is the definition of a security for purposes of the recordkeeping and confirmation requirements of Part 12. Previously, the OCC had informed national banks that if they effect a crypto transaction where the asset is a security, then they must comply with Part 12.2 While the definition of a security in Part 12 is substantially similar to the definition in the Securities Exchange Act of 1934, it is not identical. Given the recent findings by the Securities and Exchange Commission that various assets that may be custodied by banks are not securities (e.g., stablecoins, meme coins), it may be helpful for the OCC to provide clarification of the scope of Part 12.
1 See, e.g., OCC, Interp. Ltr. 1170 (July 22, 2020); OCC, Interp. Ltr. 1172 (Sept. 21, 2020); OCC, Interp. Ltr. 1174 (Jan. 4, 2021).
