For the past two years, the fastest way for a crypto company to look like part of the regulated financial system has been to apply for a national trust bank charter from the Office of the Comptroller of the Currency. On October 2, the Independent Community Bankers of America (ICBA), a trade group that mainly represents smaller institutions, went to federal court to argue the OCC never had the authority to hand those charters out the way it has been doing.

The suit does not change anything on its own, and no judge has ruled. But it is the first serious legal challenge to a pillar of the current crypto-banking strategy, and it was filed by an industry group with a long record of opposing exactly this kind of charter. As CoinDesk reported, it names crypto-focused banks such as Protego and Erebor, and companies that have sought charters like Coinbase, Circle, and Crypto.com, as examples of who stands to benefit.

What the ICBA is claiming

According to American Banker's account of the filing, the case was brought in the U.S. District Court for the District of Columbia and rests on two main arguments. The first is that the OCC exceeded the authority the National Bank Act gives it. A national trust bank is meant to perform fiduciary activities, the ICBA argues, and the agency has stretched that idea to cover firms that mainly provide custody or other services that are not fiduciary in the traditional sense.

The second is procedural, under the Administrative Procedure Act. The ICBA says a final OCC rule issued earlier this year, which allows trust charters for non-fiduciary activities, is arbitrary and capricious because the agency did not meaningfully respond to public comments. It also challenges a 2021 interpretive letter, issued during the first Trump administration, arguing that the letter was effectively a rule and should have gone through public notice and comment. Reports differ slightly on the date and details of the rule at issue, so the filing itself is the best reference.

The complaint also points to scale. According to the American Banker report, the filing says the OCC has approved or conditionally approved 21 trust banks under the current administration, at least 13 of them crypto companies. ICBA President and CEO Rebeca Romero Rainey said the group is asking the court to return the OCC to its statutory limits.

The competitive complaint behind the legal one

Legal arguments aside, the ICBA's underlying worry is competitive. Community banks operate under capital, liquidity, supervision, and FDIC-insurance requirements, and many are subject to the Community Reinvestment Act. The group argues that crypto firms holding trust charters can offer overlapping services without carrying the same obligations. In its words, as reported, the expansion creates a gap in financial regulation. Supporters of the charters would say the opposite: that a federally supervised trust bank is far better than the state-level or unregulated alternatives, and that its limits on deposit-taking and lending are the point.

The industry is not unanimous either. CoinDesk notes that the Bank Policy Institute, which represents large banks, has said trust charters should be limited to trust activities and that firms wanting traditional banking powers should seek full-service bank charters. That position is narrower than the ICBA's, but it points in the same direction.

How we got here

Our earlier reporting on the race for a federal crypto bank charter described how quickly the approvals piled up: Circle won final approval for Circle National Trust on July 10, and Ripple, Paxos, BitGo, and Fidelity Digital Assets all received conditional approvals in December 2025, with Crypto.com and Bridge following in February. The pattern turned a niche filing into the clearest signal of who the federal government treats as a legitimate crypto custodian. The ICBA suit is a direct attempt to interrupt that pattern.

The political backdrop matters too. CoinDesk notes that World Liberty Financial, a recent charter applicant, drew criticism from Sen. Elizabeth Warren, and that in September the OCC granted a full national bank charter, not a trust charter, to OpenReserve Bank. Those are separate decisions, but they feed the same debate about how far the agency should go. For background on who the OCC is and how it fits with the other agencies, see our Who's Who profile of the OCC.

What to watch

The OCC has to respond in court, and it has said it does not comment on litigation. Two things will tell us how seriously to take the case. One is whether the ICBA asks the court to pause the rule or any pending approvals while the case proceeds, which would put existing and pending charters at risk. The other is whether other parties, such as the crypto firms that hold charters or the trade groups that support them, ask to join the case to defend the rule. Neither had been reported at the time of writing.

Why it matters

Charters are not just a compliance badge. They determine who can hold institutional client assets, who can anchor stablecoin reserves, and who answers to which regulator. If the ICBA wins, crypto firms may have to choose between full bank charters, which are harder to get and carry deposit insurance and lending rules, and state-level alternatives. If the OCC wins, the trust charter becomes a settled route and the debate moves back to Congress. Either way, this is a reminder that regulatory progress made by agency rule can be reversed by a court in a way that legislation usually cannot. This is reporting, not legal advice.

Further reading

Frequently asked

What is the ICBA suing over?

The Independent Community Bankers of America, a trade group that mainly represents smaller banks, sued the Office of the Comptroller of the Currency in federal court in Washington, D.C., on October 2. According to reports on the filing, it argues that the OCC exceeded its authority under the National Bank Act by chartering national trust banks for crypto and other firms whose business is not traditionally fiduciary, and that the agency's rule and an earlier interpretive letter did not follow proper procedure under the Administrative Procedure Act.

Does the lawsuit cancel the charters crypto firms already have?

Not by itself. A lawsuit is a request for a court to act, and no court has ruled. Reports on the filing do not say exactly what remedy the ICBA is asking for. The OCC has said it does not comment on litigation, and its formal response, along with any request to pause the rule while the case proceeds, is among the things to watch.

What is a national trust bank charter, and why does it matter for crypto?

A national trust charter is a federal license to hold assets for others under OCC supervision. It does not by itself allow a company to take deposits or make loans the way a full commercial bank does. For crypto firms it offers federally supervised custody, which many institutional clients want. Our glossary has a short definition under national trust bank charter.