Seal of the Office of the Comptroller of the Currency. (Credit/AdobeStock)
The Independent Community Bankers of America (ICBA) is calling on the Office of the Comptroller of the Currency to suspend or rescind its preliminary approval of Coinbase Global's proposed national trust bank charter following a lawsuit filed by the New York attorney general against one of Coinbase's subsidiaries.
In a letter sent to the OCC, ICBA argued that allegations against Coinbase Financial Markets Inc., a wholly owned subsidiary of Coinbase Global, raise significant questions about the company's "competence, character, and integrity" that should be resolved before any final charter approval is granted.
The New York attorney general's lawsuit alleges Coinbase and Gemini operated illegal prediction markets in violation of state and federal law. ICBA said the allegations involve operating unlicensed gambling platforms without required 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/CEO Rebeca Romero Rainey said in a statement.
The OCC granted preliminary conditional approval April 2 for Coinbase to establish "Coinbase National Trust Company, New York," though the agency retained authority to modify or rescind the approval before final authorization.
ICBA's filing also pointed to previous enforcement actions involving Coinbase, including anti-money laundering deficiencies identified by New York regulators, a Connecticut consent order involving unlicensed money transmission activities and penalties tied to reporting and compliance failures.
The group separately criticized the OCC's broader framework for uninsured national trust banks engaged in cryptocurrency-related activities, arguing the approach could create safety and soundness concerns for the financial system and expose consumers to additional risks.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.