Wall Street Banks Eye Lawsuit Over Crypto Charters

The OCC national trust bank charter push — one of the most consequential regulatory shifts crypto has seen in years — has Wall Street's biggest trade group threatening to sue. The Bank Policy Institute, which speaks for JPMorgan Chase, Goldman Sachs, Citigroup, and their peers, is reportedly mulling litigation against the Office of the Comptroller of the Currency after the agency moved to make it dramatically easier for crypto and fintech companies to obtain federal banking charters.

What Is an OCC National Trust Bank Charter?

Why does a crypto firm want one?

An OCC national trust bank charter grants a company the legal authority to operate as a trust institution across all 50 states — no state-by-state licensing patchwork, no FDIC insurance requirements, no retail deposit obligations. For crypto firms, that's a massive unlock. OCC national trust bank charter approvals have now been conditionally granted to a roster that includes Circle, Ripple, Paxos, Crypto.com, and the Trump-linked World Liberty Financial, according to reports citing sources familiar with the matter.

The OCC is led by Jonathan Gould, a Trump appointee and former crypto executive who has made his position clear. At the Blockchain Association's policy summit last October, Gould dismissed attempts to block crypto custody from the federal system as 'a recipe for irrelevance,' pointing to more than $2 trillion in existing digital custodial activity at national trust banks as evidence the train had already left the station.

Why Are Wall Street Banks Threatening to Sue?

Here's the thing — the BPI's concern isn't really about systemic risk. It's about market structure. Traditional banks operate under the full regulatory stack: capital requirements, FDIC oversight, consumer protection laws, the whole architecture built up since the 1930s. The BPI argues that letting crypto firms cherry-pick bank-like powers without that burden creates an uneven playing field.

The Bank Policy Institute laid out that argument publicly back in October 2024, warning that allowing firms to choose a lighter regulatory touch while offering bank-like products could 'blur the statutory boundary of what it means to be a bank, heighten systemic risk, and undermine the credibility of the national banking charter itself.' That line wasn't written for journalists — it was written for judges.

The American Bankers Association has also waded in, urging the OCC last month to pump the brakes on charter approvals while stablecoin and digital asset legislation remains unresolved. Pointing directly to the 2022 collapses of FTX and Celsius, the ABA told the OCC to 'be patient, not measure its application decisioning progress against traditional timelines.' The Independent Community Bankers of America called the charter plan 'a significant loophole in a foundation principle of bank regulation.'

The incumbents' lawsuit talk is less a principled objection to bringing crypto under supervision and more a protest against a two-tier system where newcomers enjoy a clean, modern charter while legacy institutions remain shackled to every bolt-on rule written since the 1930s.

Kraken's Fed Account Just Changed the Calculus

If the charter debate was already tense, Kraken's move earlier this month detonated it. When Kraken secured a Federal Reserve master account from the Kansas City Fed — the first crypto bank ever to do so — the BPI immediately accused the Fed of racing ahead of its own regulatory process. That's not just criticism. That's the language you use when you're building a legal record.

ZeroHash, a stablecoin infrastructure firm, has also applied for a national trust charter with the OCC. Unlike a traditional bank, ZeroHash isn't seeking retail deposits or FDIC coverage — the application targets custodial and trust services only. But incumbents see each new applicant as another breach in the wall.

Does the Global Credibility Argument Hold Up?

Joshua Chu, the Hong Kong lawyer who spoke on the BPI's posture, went further than most commentators. He warned that the U.S. approach risks 'hard-wiring tomorrow's enforcement and credibility crisis into today's chartering decisions' if global regulatory standards aren't folded in from the start. His sharpest line: the U.S. has spent decades using AML rules, dollar dominance, and correspondent banking leverage to pressure other countries into tighter regimes — but FATF mutual evaluations have repeatedly flagged American deficiencies. That gap, Chu argued, is increasingly read as a strategic liability.

The OCC and the BPI had not responded to requests for comment at the time of writing. But with Gould publicly committed to the charter push and banks quietly consulting litigation counsel, this standoff has a collision course feel to it — and crypto firms sitting in conditional-approval limbo are caught directly in the crossfire.