Firm seeking conversion to trust bank providing crypto services gets conditional OCC approval

A Washington state-chartered trust company seeking conversion to a trust bank that will provide cryptocurrency custody services has received conditional approval by the Office of the Comptroller of the Currency (OCC), according to information released Friday.

Protego Trust Company (formerly Glacier Formation, LLC) is on a path to become Protego Trust Bank, National Association, (PTNBA), and would be a wholly owned subsidiary of the to-be-formed Protego Corporation, a Washington state corporation, according to the OCC’s Feb. 4 letter outlining the terms of the conditional approval.

“As its core product offering, PTBNA will provide cryptocurrency custody services in a fiduciary capacity for its clients by holding the unique cryptographic keys associated with Bitcoin and Ethereum,” the OCC letter states. “PTBNA anticipates expanding to support additional cryptocurrencies after launch. Eventually, PTBNA plans to offer custody services for additional types of digital assets beyond cryptocurrencies, including platform tokens, utility tokens, security tokens, commodities tokens, crypto-collectables, stable coins, and data.”

The OCC letter states that ancillary to its custody services, PTBNA will offer the following services in a fiduciary capacity:

(1) determining whether a customer should claim forked assets,

(2) staking its customers’ assets to earn rewards, and

(3) participating in the governance of certain blockchains that permit participants to use their digital assets to cast votes for decisions regarding blockchain protocols.

The OCC letter states that PTBNA plans to expand its business eventually to include:

(1) a client-to-client trading platform for assets under custody with PTBNA,

(2) a client-to-client lending platform whereby PTBNA will act as a financial intermediary, and

(3) a platform for the origination and issuance of new digital assets whereby asset owners can digitize existing and prospective assets.

Among the pre-conversion requirements is that the firm apply for membership in the Federal Reserve System. The OCC letter also states that the firm may not engage in activities that would cause it to be a “bank” as defined under the Bank Holding Company Act.

The firm has 18 months to complete its conversion, unless it gets an extension from the OCC.

OCC Conditionally Approves Conversion of Protego Trust Bank

Letter – conditional approval