OCC Opens Doors For Crypto Money Transmitters
Crypto companies have struggled to obtain basic banking services for several years. This problem has been given the friendly name 'Operation Chokepoint 2.0,' harkening to the crackdown on payday lenders and other 'high risk' category businesses from 2013 to 2015. This crackdown expanded to legitimate startups and resulted in blowback at the federal level. Last week, if any behind-the-scenes, coordinated 'operation' has been keeping crypto companies down, the OCC signaled the end of that era with Interpretative Letter 1184.
The OCC's letter clarified that national banks and federal savings associations can engage in crypto-asset activities on behalf of customers without seeking prior approval. Their attitude tracks the OCC's 2020 guidance allowing banks to custody crypto, facilitate stablecoin payments, and run blockchain nodes. Although the May 2025 guidance only covers federal banks, state banks often look to federal guidance to determine their acceptable risk profile. It is a near certainty that state banks will see the OCC's guidance and decide that banking crypto is, once again, fair game.
The letter guidance should operate as a key signal to banks that not only can they bank crypto customers, but they can also bank crypto companies. One hallmark of Chokepoint 2.0 has been crypto companies seeking money transmitter licenses (or 'MTLs') could not do so because they could not obtain trust accounts or 'FBO' (for the benefit of) accounts at major banks. This means any startup wishing to compete against the likes of Coinbase or Kraken has effectively been stopped before they can start. Without a trust or FBO account (often called a 'transactional' account) at a bank, a company cannot successfully apply for MTLs.
This chokehold has been part of the reason new centralized exchanges struggle to even launch within the U.S., and we do not have robust early-stage domestic competition for such exchanges. Beyond that, any company wishing to act as a stablecoin on- or off-ramp, or to perform cross-border remittance in cryptocurrency, or to even launch a stablecoin, will find incredible frustration when they reach the MTL stage of their lifecycle because of the years-long stubbornness within both federal and state banks refusing to provide transactional accounts to crypto MTLs.
After the OCC's guidance, federal and state banks have the freedom to bank crypto companies seeking MTLs. While many banks will still consider these customers 'high risk' due to anti-money laundering concerns, the OCC's guidance gives these banks the runway to bring crypto MTLs back into the fold of U.S. financial services.
By the end of this year, expect to see more white-label agreements between crypto companies and banks, resulting in crypto-specific services within mainstream banking applications. Or, expect to see more sponsor agreements between banks and crypto companies, where traditional crypto apps are able to offer expanded banking services. By next year, as MTLs get granted to more and more crypto-focused companies, we will see a range of non-bank financial institutions offering stablecoin ramps, new stablecoin products, DeFi products, and other interesting crypto applications - regardless of what happens in Congress with respect to any crypto-specific bills. The OCC letter opens the door for a range of potential applications, and now that the doors have been nudged open, builders may be pushing through in droves.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
a day ago
- Yahoo
State of Crypto: Someone Tried to Scam Me (Probably)
Coinbase won't call customers to warn them that their accounts may have been compromised. It's a common scam vector. Still, someone tried it on me. You're reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions. Last weekend, an unknown California number called me. A helpful gentleman informed me that my Coinbase account had been compromised during its recent data breach and he was there to assist me in not losing my assets. Oh no, the horror! All right, so obviously this is a scam. Right after hanging up with this supposed help desk agent, I texted a Coinbase spokesperson to verify that at no point would the exchange call a customer to tell them their account was compromised. It's scam 101 — if you're getting a phone call informing you that your account's been compromised, whether at a crypto exchange, a bank, the IRS, whatever, it's a scam. Do not share your personal details and do not provide any passwords if you get a call like this. There were a few flaws in the attempt to get me to, presumably, move my funds from my supposedly compromised Coinbase account to another address. But I'm hopeful that this can be a useful teaching moment for the nearly 70,000 people who have been affected by Coinbase's recent breach disclosure, as well as anyone else who receives a phone call claiming their information has been compromised. Here's how this went down. Let's start from the beginning. On Saturday, May 24, I received a call from a number I didn't recognize to my personal phone, not my public-facing work number. It being a weekend, one where I was actually visiting family in another state, I didn't pick up. Then the same number called back and I still didn't pick up (yes I know, riveting, but it's 2025 and you can leave a voicemail or text). Ten minutes later, I received a third call from a different number, which I did pick up because at that point I was curious. A fast-talking gentleman who called himself Riccardo told me he was part of Coinbase's Actions and Protections Department and that he was reaching out because my Coinbase account information had been compromised and a new email had just been added to my account. I was pretty confused, for reasons I'll get into below. But I was also intrigued because there were immediately four red flags. For simplicity's sake, I'll refer to the caller as "the agent" from here on out, but to be absolutely clear, I doubt he is an actual customer service agent, representative or other employee of Coinbase, and he certainly was not reaching out to me as an authorized representative of the exchange. First off, the phone call itself is a big red flag. Coinbase will never call a customer about a breach, but rather will contact customers via email, it previously said in a tweet. This is actually standard. The Federal Trade Commission website notes there is a vast range of scams wherein someone will call you, and numerous other companies have warnings that their employees will never proactively call a customer about account issues. The agent I spoke to said they would freeze my account for 24 hours to ensure no funds could be stolen (thanks, I guess?) and that a supervisor would reach out to me (I continue to wait for this supervisor to call). This supposed freeze on my account can be extended to three months if there are multiple failed login attempts. To wrap up the call, he said he'd send me an email summarizing all the details we'd discussed. On Saturday night, I received an email with the subject line "your case is under review." The follow-up email this very helpful customer service representative sent was extremely informative. For one thing, the email address they had associated with my account is a public-facing address, but is not the email address attached to my actual Coinbase account (in fairness, I forgot that part until I tried to find my login information a few days later). Gmail initially (correctly) flagged this email as spam. I moved it to my inbox, where Gmail then showed me that the sender (help@ was not the actual sender — the email arrived via Even the part is sketchy — for one thing, Coinbase's website is though it does send emails from info@ — still, you wouldn't expect a hyphen in a support email domain. For another, the info-coinbase domain was first created in November 2024 (according to an ICANN lookup) and isn't a real website. The email headers were also not super helpful in terms of providing any sort of identifying information, but they did confirm that the sender appeared to have tried to obfuscate their information. Curiously, the "Visit Coinbase" link at the bottom appeared to link to the actual Coinbase website and there do not appear to be any hidden embedded images or other attached files in the email at all. I'm not totally sure what's going on there. A real scammer could have embedded a virus of some sort into the email or even a tracking pixel. Another common tool scammers might use is putting in a phishing link in place of a legitimate one in an email, tricking the user into going to a website intended to steal their login information (this is not legal, technical or any other sort of advice; if you decide to try and scam somebody using information you gleaned from this newsletter, stop it). While scammers might sometimes know how much their intended victims have in a wallet or account, the person who called me did not appear to have that information (as I have zero crypto in my Coinbase account). I called the number back on Friday to see what might happen. No one picked up. I guess my account must be secure now. : Stand With Crypto announced Soulja Boy and 070 Shake would headline a "get out the vote rally" next week ahead of New Jersey's governor primary election. SWC removed Soulja Boy a day later after discovering he was found liable for sexual battery and assault charges and ordered to pay $4 million last month, in a case stemming from 2021. : SEC Commissioner Hester Peirce told the Bitcoin 2025 Las Vegas audience that it's fine to invest in speculative assets, especially if there's no federal regulator with close oversight, but those investors can't ask for a bailout when prices sink. : House Republicans have formally introduced the Digital Asset Market Clarity Act, its market structure bill, just weeks after circulating a discussion draft. : The SEC's latest staff statement looks at staking and how the securities regulator might evaluate that part of the crypto ecosystem. : The SEC and Binance filed a joint stipulation to drop the regulator's case against Binance. : News broke over the weekend that a crypto investor had been kidnapped and tortured for his Bitcoin keys. Two suspects accused of perpetrating the kidnapping have been arrested and pled not guilty. : Jamie Raskin, the top Democrat on the House Judiciary Committee, wrote a letter to U.S. President Donald Trump calling on him to publish the names of his guests at last week's memecoin dinner. Friday 15:00 UTC (11:00 a.m. ET) A federal judge held a telephone hearing to assess Roman Storm's defense argument that the Department of Justice may have withheld information. The judge ruled that in her view, the DOJ did not have to review its materials and had not withheld information that rose to the level of affecting proceedings. () The White House published a "Make America Healthy Again" report that cited nonexistent studies and references — with telltale signs that AI may have been used to generate at least some parts of the report. () The Fed said 8% of adults who responded to a survey said they held cryptocurrency in the U.S., down from 12% four years ago. If you've got thoughts or questions on what I should discuss next week or any other feedback you'd like to share, feel free to email me at nik@ or find me on Bluesky @ You can also join the group conversation on Telegram. See ya'll next week!
Yahoo
a day ago
- Yahoo
An Extremely Profitable Business Plans to Go Public. What Investors Need to Know.
This company's revenue is growing at a high-double-digit percentage rate while commanding a compelling profit margin. This interesting cryptocurrency company will be worth watching as it makes its market debut. 10 stocks we like better than USDC › On May 27, Circle Internet Group updated its filings to become a publicly traded company. It's possible that investors haven't heard of Circle. But cryptocurrency enthusiasts are likely quite familiar with Circle's stablecoin USD Coin (CRYPTO: USDC), the second-largest stablecoin by market cap. A stablecoin is an interesting class of cryptocurrency. The price of Bitcoin (CRYPTO: BTC), for example, recently increase to an all-time high because its price changes relative to the U.S. dollar. It has a mechanism that controls the circulating supply of Bitcoins. And if demand exceeds this supply, then the price goes up. Stablecoins such as USDC don't work that way. Those wanting to use stablecoins can go to a cryptocurrency exchange such as Coinbase (NASDAQ: COIN). Once there, they deposit real dollars and exchange them for stablecoins. For every dollar they put in the system, a corresponding stablecoin is issued. This way, the price of each stablecoin should always be $1, rather than fluctuating like Bitcoin. Moreover, users should be able to exchange stablecoins back for dollars if and when they choose. Circle is a stablecoin issuer, and this business model can actually be extremely profitable. The costs to operating a stablecoin system are relatively low. Meanwhile, the stablecoin issuer needs to keep reserves in case users redeem their coins. These reserves turn into stable interest and investment income. The largest stablecoin entity is Tether, with a market value of more than $150 billion. It's not publicly traded, but it still reports financials from time to time. In the first quarter of 2025, it reported an operating profit of $1 billion, it had excess reserves of $5.6 billion, and its management is busily investing in other business ventures such as renewable energy. In other words, Tether seems to be a cash cow business with low need to reinvest in the business, freeing it to invest in other opportunities. This favorable stablecoin business model is why investors should keep an eye on Circle. Let's start with some concrete numbers. In the first quarter of 2025, Circle's total revenue rose 58% year over year to $579 million. And the company had operating income of $93 million, which was up 78%. That's good growth. And the table shows progress during the past three years. 2022 2023 2024 Revenue* $772 million $1.5 billion $1.7 billion Gross margin 60% 50% 39% Operating income ($38) million $270 million $167 million Data source: Circle's filings. Table by author. *Revenue from continuing operations. Circle had a Q1 operating margin of 16%, which is good. But the one thing apparent from the table is that the company has traded profitability for growth. Growth skyrocketed in 2023, whereas its gross margin took a significant step back. What gives? As it turns out, cryptocurrency exchange Coinbase helped launch USDC originally, so it's long had a vested interest. The company perceived that the stablecoin needed help, and so it reworked its partnership with Circle in 2023. Coinbase actively began pushing for USDC's growth while taking a larger cut of the profits. In other words, Circle would likely be far more profitable if it didn't partner with Coinbase. But otherwise, it might not be as big as it is today. It's something to be aware of, but the partnership is probably a net benefit. At the risk of oversimplifying things, high-growth, profitable businesses often make good investments. For this reason, I believe investors should watch Circle Internet Group stock once it goes public. But there are some risks to consider as well. First and foremost, Circle profits from user deposits. Although this is easy money, a lot of it has to do with interest rates, which are outside the company's control. Supposing rates trended lower, it would lower Circle's interest income. It's theoretically possible to see adoption go up and interest income go down. Second, as of this writing, Tether's market cap is $153 billion, according to CoinMarketCap, whereas USDC is only $61 billion. This suggests stablecoin users prefer Tether. In fact, without Coinbase's big push in 2023, it's debatable how big USDC would be. So it's fair to question the sustainability of its growth from here. Finally, legislation regarding stablecoins is always a concern. The current political atmosphere in Washington appears favorable to cryptocurrency. But the market could benefit from legislative clarity, and there's no guarantee which way things could go. However, taking this all into consideration, I believe that Circle stock could be a good long-term investment. This assumes that cryptocurrency adoption continues, Coinbase stays in its corner, and interest rates don't plunge overnight, which I believe are reasonable assumptions. For these reasons, I'll be watching Circle as it goes public. Before you buy stock in USDC, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and USDC wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy. An Extremely Profitable Business Plans to Go Public. What Investors Need to Know. was originally published by The Motley Fool
Yahoo
a day ago
- Yahoo
Wells Fargo Approaches End of Asset Cap as OCC Lifts 2015 Consent Order
A significant 2015 consent order was lifted by the U.S. Office of the Comptroller of the Currency (OCC), which moved Wells Fargo & Company (NYSE:WFC) closer to removing its $1.95 trillion asset cap. A team of bankers in suits, discussing the success of the company's banking products. Significant regulatory progress has been made under CEO Charles Scharf, as evidenced by the closing of the seventh regulatory enforcement order in 2025 and the thirteenth since 2019. The Federal Reserve's 2018 consent order, which is linked to changes in governance and controls, is the last obstacle. Wells Fargo & Company (NYSE:WFC) has experienced regulatory attention since its 2016 fake accounts scandal, which resulted in billions of dollars in fines and an unprecedented asset cap imposed by the Federal Reserve in 2018. This week witnessed the lifting of the OCC order about its former financial subsidiaries. Scharf, who took office in 2019, has implemented measures that experts such as Stephen Biggar of Argus and Chris Marinac of Janney Montgomery Scott believe are significant. After limitations are lifted, the bank plans to expand its market operations and wholesale deposit base. While we acknowledge the potential of WFC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WFC and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure. None.
