U.S. lawmakers blast crypto trust licenses for being issued chaotically, naming Coinbase and 9 other companies that should not receive licenses, alleging violations of banking laws

U.S. Senator Elizabeth Warren sent a letter to the Office of the Comptroller of the Currency, protesting that it violated the National Bank Act and issued U.S.-wide trust licenses to nine crypto companies, including Coinbase.

Warren questions OCC head’s approval of “unsuitable” crypto trust licenses

On May 18, Elizabeth Warren, a member of the U.S. Senate Banking Committee, submitted a protest letter to Jonathan Gould, Acting Director of the Office of the Comptroller of the Currency (OCC).

Image source: U.S. Senate Warren sharply criticizes OCC for alleged violations of the National Bank Act and abuse of authority

In the letter, Warren sharply criticized the OCC for allegedly violating the National Bank Act and abusing authority since December 2025, by extensively issuing U.S.-wide trust approval licenses to nine cryptocurrency and fintech companies. The list of accused companies includes Coinbase, Ripple, Circle, BitGo, Paxos, Fidelity Digital Assets, Protego Holdings, the parent company of Crypto.com, and Bridge, Stripe’s stablecoin subsidiary.

Warren criticized these companies as essentially “crypto banks,” yet they are trying to evade the federal deposit insurance premium requirements of traditional banks, strict capital requirements, and comprehensive oversight under the Bank Holding Company Act by using narrowly defined trust licenses.

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Backdoor regulatory arbitrage and the Franken license controversy

The core of this legal dispute lies in the federal powers unlocked by U.S.-wide trust licenses. Crypto companies holding this license can directly access the Federal Reserve’s payment network, enabling real-time settlement and interbank transfers.

However, critics including Warren and the Conference of State Bank Supervisors (CSBS) point out that the business plans of these nine companies explicitly state activities such as staking (Staking), financing and lending, operating trading platforms, and issuing stablecoins—clearly going far beyond the scope of asset custody and management that trust companies are legally allowed to conduct.

The current president of CSBS mocks this patchwork structure as a “Franken license” (Frankenstein license). Critics argue that, on March 2, 2026, the OCC quietly expanded the scope of trust companies’ business activities through modifications to regulatory wording, without congressional authorization—a move that helps the crypto industry carry out large-scale “regulatory arbitrage,” bringing serious risks to the stability of the financial system and consumers’ interests.

The target is Trump family businesses and potential conflicts of interest

This is not the first time Warren has publicly clashed with OCC Director Gould. At a Senate hearing in February 2026, Warren harshly criticized Gould as an accomplice to the Trump administration’s push for crypto enthusiasm. The trigger was a crypto company supported by U.S. President Donald Trump’s family, World Liberty Financial (WLF), which officially submitted a trust license application to the OCC in January 2026.

Warren had strongly demanded that the OCC pause or reject the review until the Trump family fully divested its equity stake in the company. In addition, media reports revealed that foreign senior officials allegedly secretly acquired nearly 49% of WLF’s shares, raising serious questions about national security and conflicts of interest.

In this latest letter, Warren not only demands that the OCC hand over complete applications for all approved companies by June 1, but also strongly requests all communication records between the OCC and Trump himself, his family members, and senior White House officials.

• Related news: Don’t let Trump get rich off it? Lawmakers call for a pause on WLFI bank license review until Trump cuts crypto ties

Bipartisan tug-of-war over digital currency dominance in Washington

At the same time that Warren from the left-wing camp was blasting crypto companies for infiltrating traditional banking, the right-wing forces in Washington launched an all-out counterattack from another direction. Recently, Mike Flood, a Republican member of the U.S. House and chair of the House Housing and Insurance Subcommittee, published an article in the media pushing back against Warren, accusing her of quietly endorsing the “21st Century Housing Road Act” passed by the Senate.

Flood points out that, on the surface, the provision calls for “delaying” the implementation of central bank digital currency (CBDC), but the legal language carries the implicit premise that the Federal Reserve has the authority to issue digital dollars without congressional approval.

Republicans denounced this move as laying the groundwork for a full rollout of CBDC by 2030, posing a major threat to the public’s financial privacy. At present, the House has removed that digital currency provision from the bill through amendments. This back-and-forth political struggle between the two camps fully demonstrates Congress’s deep disagreement over the regulatory boundaries for digital currencies.

• Related news: Two parties join forces to block it! U.S. Congress passes a bill to ban the Fed from issuing CBDC before 2031