FDIC
Federal Deposit Insurance Corporation
10 10th Street NE, Suite 800
Atlanta, Georgia 30309-3849

Atlanta Regional Office
Division of Risk Management Supervision
(678) 916-2200

April 30, 2021

President XXXXX
XXXXX

Subject: Letter Dated February 12, 2021

Dear XXXXX,

Your letter requests FDIC non-objection or approval for XXXXX to provide cryptocurrency custody services for customers, including holding unique cryptographic keys associated with cryptocurrency, and other related services.

The FDIC is unable to provide feedback on the proposed cryptocurrency custody services without additional information.

First, concerning the proposed cryptocurrency custody services, the FDIC needs to determine whether the bank has the appropriate expertise and risk management framework to appropriately manage and oversee the activity. Thus, we recommend that the bank submit detailed information regarding its existing or proposed oversight framework. The FDIC also needs to determine whether this activity is being conducted in a fiduciary capacity under state law. The XXXXX, in its February 16, 2021 letter, offered the Bank the opportunity to request a declaratory statement pursuant to XXXXX Statutes. Thus, we recommend that the Bank obtain such statement from the XXXXX concerning the permissibility of the proposed cryptocurrency custody services and whether such services will be considered fiduciary activities under state law.

Second, the Bank’s letter lists additional services contemplated by bank management, including cash custody, lending against cryptocurrency, and settlement services, but provides insufficient detail for our review. After we have completed our review of the proposed cryptocurrency custody services, we recommend that you provide a detailed explanation of the additional services that the Bank intends to provide.

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We understand this is an emerging area in the banking and financial services industry. We are happy to meet with you at your convenience to discuss your proposed activities and address any questions you may have regarding our request for additional information. If you have any questions, or wish to schedule a meeting, please contact Case Manager XXXXX.

Sincerely,

TIMOTHY
RICH

Timothy D. Rich
Deputy Regional Director

Digitally signed by
TIMOTHY RICH
Date: 2023.10.03 09:10:23
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