The Independent Community Bankers of America (ICBA) today called on the Office of the Comptroller of the Currency to rescind or suspend its conditional approval of Coinbase Global’s application for a national trust bank charter until criminal allegations against Coinbase’s wholly owned subsidiary, Coinbase Financial Markets Inc., are resolved. This follows the New York State Attorney General’s lawsuit alleging that the Coinbase Global subsidiary is violating New York and federal laws by running illegal prediction markets that lack consumer protections and internal controls.
“The serious allegations that a Coinbase Global subsidiary is operating illegal, unlicensed gambling operations raises concerns about its application to form a national trust bank that the OCC should consider,” ICBA President and CEO Rebeca Romero Rainey said. “This complaint clearly raises significant questions regarding Coinbase Global that must be resolved before final approval of its national trust charter application is granted.”
ICBA has previously cautioned the OCC that granting a conditional approval of Coinbase’s application for a national trust bank charter would put consumers at risk. In a letter to the OCC following Coinbase’s application last fall, ICBA noted significant deficiencies with the application, including flawed risk and control functions, profitability challenges, and resolution risks.
Additionally, ICBA continues to have significant concerns with the OCC’s chartering rule for national trust banks. In a recent comment letter, ICBA said the OCC’s plan to charter uninsured national trust banks that engage in non-fiduciary cryptocurrency-related activities without being subject to the Bank Holding Company Act and other prudential requirements that apply to FDIC-insured institutions poses critical public policy concerns for consumers and the stability of the financial services sector. In the letter, ICBA reiterated its call for the OCC to withdraw the rule or reissue an amended proposal consistent with its own statutory authority.