Community banks sue the OCC over crypto trust charters after 21 approvals, at least 13 of them crypto firms

The Independent Community Bankers of America sued the Office of the Comptroller of the Currency on Friday. The trade group says the regulator has gone beyond its legal authority by giving national trust bank charters to crypto and fintech companies. The suit, filed in the U.S. District Court for the District of Columbia under the Administrative Procedure Act, was first reported by American Banker.

The case targets two things, according to CU Today. One is the OCC's March 2 final rule tied to Interpretive Letter No. 1176, which lets trust banks carry out non-fiduciary activities such as custody. The other is the OCC's conditional approval in February of a national trust charter for Protego Holdings Corp., a digital-asset firm. The ICBA asks the court to declare the rule and the letter unlawful and to vacate Protego's approval.

How many charters are at stake

American Banker counts 21 trust banks approved, conditionally or in full, under the current administration, and at least 13 of them are crypto companies. Recipients include Coinbase, Circle and the Trump family-linked World Liberty Financial. The suit names only Protego's approval directly. A ruling against the March rule could still reach the others, because that rule is what allows trust banks to do non-fiduciary custody work in the first place.

"Congress did not create the national trust charter as a side door into the banking system for crypto firms," ICBA president and chief executive Rebeca Romero Rainey said. She argued that these firms gain the credibility of a federal charter without the Community Reinvestment Act obligations, capital and liquidity standards and FDIC insurance that apply to banks that take deposits. Comptroller Jonathan Gould has said trust charters have always covered non-fiduciary activity, and that holding digital assets in custody is similar to the electronic safekeeping of company shares that trust banks have done for decades, American Banker reported. It also noted that Gould wrote the original interpretive letter as the OCC's chief counsel in the first Trump administration.

The same day, the first crypto trust bank shrinks

Anchorage Digital, which in 2021 became the first crypto company to receive a national trust charter, is cutting about 17% of its workforce, The Information reported Friday, citing people familiar with the matter. Based on the roughly 400 employees Anchorage had in February, that is about 68 jobs, Cointelegraph calculated. Cointelegraph said Anchorage did not immediately respond to a request for comment. The cuts come during a long crypto downturn, with Bitcoin still well below its October 2025 peak of $126,000. Anchorage was valued at $4.2 billion earlier this year and received a $100 million strategic investment from Tether.

The lawsuit and the layoffs are not connected. Read together, though, they illustrate what the ICBA is arguing: a national charter does not make a company's business any more stable, and its customers do not get the deposit insurance a bank customer gets.

Who it actually hits

For traders, a trust charter is what lets a crypto firm hold customer assets in custody across all 50 states under a single federal regulator instead of state by state. Coinbase shares were down 3.4% at $182.95 and Circle was down 2.3% at $81.02 late Friday afternoon on Nasdaq.com data. Bitcoin was also slightly lower, at $84,178 on Coinbase against $84,645 a day earlier, so we can't attribute those moves to the lawsuit.

For a small-business owner, the ICBA's argument is about where deposits end up. Its members are community banks, which lend to local businesses, and the group says deposits that move to trust-chartered crypto firms come with no obligation to lend in the communities they leave. The case will take months. Until a judge rules, the charters already approved stay in place.

Related: the SEC's crypto custody proposal and crypto prices.

Sources: American Banker, CU Today, Cointelegraph (citing The Information), Nasdaq.com. Job count based on Cointelegraph's figure of about 400 employees. This is market information, not investment advice.