Three US Fed banking regulators issued a joint statement on Monday, reminding banks that offer crypto custody to follow risk-management considerations.
The Federal Reserve, Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC) discussed how existing laws, regulations and risk-management protocols apply to crypto ‘safekeeping.’
The agencies clarified that the statement does not create any new supervisory expectations, emphasizing the need for stronger risk-management practices.
“[The statement] reminds banks that provide or are considering providing safekeeping of such assets that they must do so in a safe and sound manner and in compliance with applicable laws and regulations.”
Banks Can Provide Crypto Custody in Two Forms: Fed Agencies
The trio of agencies stressed that the proper way to custody such assets involves “controlling the cryptographic keys associated with the crypto-asset in a manner that complies with applicable laws and regulations,” a detailed 7-page memo read.
Further, banks can offer crypto custody in two forms: fiduciary and non-fiduciary, they added.
In a fiduciary arrangement, where banks are legally authorized to act on…
