In a major move to clarify regulatory expectations, the Federal Reserve, OCC, and FDIC have jointly issued a policy statement on how U.S. banking organizations can safely engage in crypto-asset safekeeping. This is not a new law—but a serious reiteration of existing standards applied to this evolving asset class.
📌 What’s New? Nothing. But Everything.
The agencies are clear: this is a reaffirmation, not innovation. Existing frameworks around risk, fiduciary duties, AML/CFT compliance, and cybersecurity already apply—and banks must treat crypto custody with the same rigor as traditional custodial services.
💼 Key Highlights:
✅ Custody ≠ Control: True safekeeping means exclusive control of private keys. If customers can still move assets, the bank doesn’t have custody.
✅ Risk Management is Critical:
• Crypto market volatility
• Evolving technologies and wallet types
• Contingency planning for key loss or compromise
• Cold vs. hot storage tradeoffs
✅ BSA/AML & OFAC: Yes, the Travel Rule still applies—even if blockchains weren’t built to support it.
✅ Third-Party Custody ≠ Outsourced Responsibility: Banks are liable for sub-custodian failures.
✅ Smart Contracts, Forks, Airdrops: Your legal agreement must anticipate them all.
✅ Audit Expectations: Internal or external audit functions must evaluate safekeeping operations, even down to key deletion protocols.
📣 Bottom Line:
If you’re a bank thinking of entering crypto custody—get your legal, compliance, and IT teams in the same room now. The bar is high, the risks are nuanced, and regulators are watching closely.
💬 Are U.S. banks ready to compete with crypto-native custodians like Coinbase or BitGo?
Or are these frameworks too rigid for real innovation?
Let’s discuss 👇👇👇
Follow @DubaiCryptoLawyer
#CryptoCustody #BankingRegulation #OCC #FDIC #FederalReserve #CryptoCompliance #DigitalAssets #CryptoAssets #BlockchainLaw #Custodianship #Web3 #CryptoRisk #AML #TravelRule #Stablecoins #CryptoLaw #LinkedInNews #USBanking #CryptoSecurity #DigitalFinance #RegulatoryCompliance