tl;dr
Three US Federal Reserve banking regulators—the Federal Reserve, FDIC, and OCC—issued a joint statement urging banks offering crypto custody to follow strict risk-management protocols and comply with existing laws. They clarified no new supervisory rules were introduced but emphasized safe and sound...
Three US Federal Reserve banking regulators issued a joint statement on Monday to remind banks offering crypto custody to adhere to strict risk-management protocols. The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) emphasized that banks must comply with existing laws and regulations when safeguarding crypto assets, underscoring the need for strong risk-management practices.
The regulators clarified that their statement does not impose new supervisory expectations but reiterates that banks must provide safekeeping of crypto assets in a safe and sound manner, fully complying with all applicable requirements. The agencies outlined that proper custody involves controlling the cryptographic keys associated with digital assets in line with the law.
Banks can provide crypto custody in two forms: fiduciary and non-fiduciary. In fiduciary arrangements, where banks act as trustees on behalf of clients, specific federal regulations such as 12 CFR 9 or 150 must be followed, alongside relevant state laws. For non-fiduciary services, banks are required to implement rigorous safeguards against cyber threats, data loss, and private key mismanagement to protect customers' digital assets.
This move marks a shift from previous stances where US Fed agencies restricted banks from engaging easily with crypto businesses. Notably, the FDIC has removed "reputational risk" as a criterion in bank supervision, signaling a more crypto-friendly regulatory environment. Additionally, new guidance now allows supervised banks to engage in crypto-related activities without seeking prior approval, advancing the integration of digital assets into traditional banking frameworks.