Karla Barker 
Silvergate’s Collapse Still Shapes the Debate
Alan Lane, former CEO of Silvergate, says the crypto-focused bank survived withdrawals of roughly 70% of its demand deposits before political pressure pushed it toward liquidation. Lane blamed the Biden administration for making continued operations untenable. He said Silvergate remained solvent and liquid after the late-2022 run and could have kept serving customers. The Federal Reserve’s inspector general gave a different story in September 2023. It pointed to concentrated crypto deposits, fast growth, funding risks, and weak governance and risk management. The Fed later confirmed Silvergate completed liquidation, repaid all customer deposits, and stopped operating as a bank. It also fined the bank $43 million for anti-money-laundering failures. Does a federal charter protect a crypto firm from Washington, or bring Washington closer?
New Trust Charters, Same Supervisor?
More than three years after Silvergate announced its wind-down, crypto companies are obtaining federal trust-bank charters. These charters put custody businesses directly under the Office of the Comptroller of the Currency. The OCC conditionally approved Ripple and Circle’s proposed bank, plus conversions for BitGo, Fidelity Digital Assets, and Paxos. Circle announced final approval on July 10 for Circle National Trust. Coinbase received preliminary conditional approval on April 2 for fiduciary digital asset custody. Zerohash and others have pending applications. The structure gives firms an established legal path for safeguarding customer assets. It also creates a direct supervisory relationship with Washington. And it can leave firms dependent on other banks for cash. Coinbase’s proposed trust bank would not be insured. Fiat held in custody would sit in for-benefit-of accounts at third-party banks.
Rules And Reputation Risk
In November 2021, the OCC imposed a written non-objection process for certain crypto activities. On March 7, 2025, it rescinded that process and withdrew from two 2023 interagency crypto-risk statements as they applied to its banks. The reversal changed the route into crypto activity, but examinations and safety-and-soundness obligations remain. An OCC and FDIC reputation-risk rule effective June 9 bars adverse supervisory action based on reputation risk. It also bars pressure on institutions to cut off customers solely for lawful but politically disfavored activity. On Aug. 27, the agencies announced new standards for unsafe or unsound practices and matters requiring attention. Those standards focus on material financial harm or deposit-insurance risk. They exclude reputational concerns unrelated to financial condition. The final rule was published Sept. 1 and takes effect Nov. 2.
Protection Is Conditional
Rules adopted this year limit how regulators can use reputation risk, but they do not remove oversight of custody, compliance, or financial resilience. Firms might face tighter conditions or more examiner work even if the charter survives. Becoming a national trust bank can give a crypto company more control over custody and a firmer legal position. It also creates a direct relationship with Washington. The durability of the rules governing that relationship may matter as much as the charter itself. Perhaps that is the real test.