Warren Challenges Legality of Crypto Firms' Bank Charters

The Office of the Comptroller of the Currency (OCC) has been granting national trust charters to nine crypto firms, including Ripple, since December. Senator Elizabeth Warren has sent a letter to the OCC, questioning the legality of these charters and accusing the agency of allowing regulatory arbitrage.

Warren argues that these companies are using narrow trust charters for full bank activities, such as facilitating payments, extending loans, and issuing stablecoins. She claims that this is in violation of the National Bank Act, which limits the powers of trust companies. The senator has given the OCC until June 1 to respond and provide records of the charter applications.

The crypto industry has pushed back against Warren's accusations, arguing that Congress has already blessed these charters through the GENIUS Act. However, traditional bank lobbyists have sided with Warren, seeing this as an opportunity to limit the power of crypto firms.