Anchorage Becomes First Federally Regulated Crypto Bank

Jafrin  |  Jan 14, 2021

Crypto custodian Anchorage has secured a federal charter from the Office of the Comptroller of the Currency (OCC), making it the first digital asset bank to receive a banking charter. This comes as a significant milestone for the crypto industry as it will enable banks and financial institutions to use Anchorage in offering Bitcoin and other cryptocurrencies to their customers. Prior to that Kraken and Avanti had also received state charters for digital asset banks in the state of Wyoming.

Anchorage Secures Federal Charter from the OCC

Anchorage is the first digital asset bank to receive a banking charter granted by the OCC. In Nov. 2020, the institutional crypto custody firm had announced seeking a national trust charter. On Jan. 13, the OCC conditionally approved Anchorage Digital Bank’s application for a national trust charter.

The OCC released a statement that read:

“In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications. By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC’s extensive supervisory experience and expertise.”

Anchorage was Initially founded in 2017 by two former employees of Square. The firm initially offered institutional crypto custody services. The company now offers a host of other services that include trading, lending, and DeFi tools and services.

In 2019, the firm had received $40 million from Visa and Andreessen Horowitz for its Series B funding round.

OCC Issues Trust Charter to Anchorage

Anchorage is the first cryptocurrency company to receive a federal charter despite Kraken and Avanti both receiving state charters for digital banking services in Wyoming. Even though Kraken and Avanti can operate nationally, it comes with certain limitations.

Meanwhile, the charter issued to Anchorage is the trust charter, which does not entitle the company to claim the backing of the FDIC, as traditional savings and checking accounts do. However, the company claims that is not a concern for institutional clients, as Anchorage has a comprehensive policy with insurance giant Aon to serve as a backup.

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