Cryptocurrency institution custodian Protego’s conditional trust banking national charter has expired without it receiving permanent approval, according to a March 17 report in Fortune.
A spokesperson for the United States Office of the Comptroller of the Currency (OCC) told Fortune that the company did not meet the pre-conversion requirements. According to a spokesperson:
“[The] pre-conversion requirements include policies, procedures, systems and other measures to ensure safe and sound bank operations as well as meeting minimum capital and liquidity requirements.
Protego, based in Washington state, was granted an 18-month conditional charter in February 2021, which has been extended once. In a conditional charter, the organization cannot accept deposits. An unnamed source told Fortune that Protego had reached an agreement on the financing needed to meet the charter requirements on February 4, but did not receive a firm answer on the charter.
The March 5–11 OOC bulletin lists Protego and indicates that time has expired for conversion on February 4.
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Protego founder and chief executive Greg Gilman told Fortune that he feels the company has met the funding requirements and that the company can apply again to the OCC, which is a division of the federal Treasury Department, or apply to state authorities to operate as a state bank. .
SCOOP: OCC says crypto company Protego doesn’t meet requirements to be converted into national trust bank, another big setback for crypto industry as banking options dwindle:https://t.co/WdopSyOdZS
— Leo Schwartz (@leomschwartz) March 17, 2023
The federal charter will allow Protego to maintain digital assets and perform credentialing functions, such as Know Your Customer steps. Currently, Anchorage Bank is the only crypto company to receive a national banking charter.
Custodia Bank was denied a place in the Federal Reserve System on February 23. Paxos also received a conditional national trust bank charter in 2021. A spokesman said that the company “continues to work constructively with the OCC” in the pending application.