On May 7, the OCC clarified permissible activities for national banks and federal savings associations regarding crypto-asset custody and execution services by publishing Interpretive Letter 1184. This letter confirmed institutions may buy and sell assets held in custody at the customer’s direction and are permitted to outsource to third parties bank-permissible crypto-asset activities, including custody and execution services, subject to appropriate third-party risk management practices. As previously covered by InfoBytes, the OCC issued its Interpretive Letter 1183, which affirmed that institutions could engage in various cryptocurrency activities, including crypto-asset custody and stablecoin activities, and use distributed ledgers as a modern form of traditional bank custody activities. This authority was also addressed in OCC Interpretive Letter 1170.
Letter 1184 noted a bank may buy and sell assets held in custody on a customer’s behalf at the direction of the customer and consistent with the customer agreement and applicable law. According to the OCC, cryptocurrency and fiat currency exchange and trade execution services fall under these activities. Similarly, a bank may use a sub-custodian to provide custody services, including the services described above. Interpretive Letter 1183 reaffirmed that the crypto-asset custody, distributed ledger, and stablecoin activities discussed in prior letters are permissible, but noted that with any activity, the bank must conduct crypto-asset custody activities in a safe and sound manner and in compliance with applicable law.
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