Federal banking regulators have issued a statement regarding banks' activities related to bitcoin and crypto-assets, emphasizing adherence to existing laws and robust risk controls. The notice clarifies that banks can provide custody for crypto-assets either in fiduciary or nonfiduciary capacities, mandating compliance with specific regulations. It highlights the importance of strong cybersecurity and operational expertise, and banks must assess risks associated with crypto safekeeping. Existing regulatory requirements applicable to banking activities, including AML, CFT, and OFAC sanctions, still apply to crypto-asset safekeeping.
Banking organizations may provide safekeeping for crypto-assets in a fiduciary or a nonfiduciary capacity. Banking organizations that provide crypto-asset safekeeping in a fiduciary capacity must comply with 12 CFR 9 or 150, as applicable, state laws and regulations, and any other applicable legal provisions, such as the instrument that created the fiduciary relationship.
Safekeeping bitcoin and other crypto-assets, mainly through control of customers' cryptographic keys, requires strong cybersecurity, operational expertise, and full legal compliance. Banks offering these services must be prepared to protect against risks such as key loss, cyberattacks, and unauthorized asset transfers.
Like all other banking activities, crypto-asset safekeeping relationships are subject to applicable Bank Secrecy Act/anti-money laundering (BSA/AML), countering the financing of terrorism (CFT), and Office of Foreign Assets Control (OFAC) requirements.
Banking organizations should conduct a full risk assessment before engaging in bitcoin and other crypto safekeeping. This includes evaluating the nature of different crypto-assets, the technology involved, and the potential risk and regulatory implications.
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