FDIC Announces Notice Requirement for “Crypto-Related Activities” | PC Weiner Brodsky Kider


The FDIC recently announced, via Financial Institutions Letter 16-2022 (FIL-16-2022), that FDIC-supervised institutions must notify the FDIC if they intend to engage or are currently engaging in activities related to “cryptographic assets”. The institution is required to provide the FDIC with “all necessary information that would enable the FDIC to engage with the institution regarding related risks.” The notice should describe the activity in detail and include a proposed timeline for engaging in the activity. The institution must provide the initial notification to the FDIC Regional Director. The letter also encouraged institutions that notify the FDIC to notify their state regulator.

Once an institution submits the notice, the FDIC may request additional information, which will vary depending on the type of crypto-related activity described in the notice, and then the agency will provide relevant supervisory comments, if applicable.

The letter defines a “cryptographic asset” as generally “any digital asset implemented using cryptographic techniques.” The letter also gives examples of what constitutes “cryptography-related activities”, although it notes that given the evolving nature of the subject, there may be other activities that constitute cryptographic activities that would require a notice. The letter cautions, however, that this list of activities should not be construed as a statement that the activities are deemed permitted. The letter includes the following activities in its description of “crypto-related activities” requiring notice:

  • Act as custodians of crypto-assets;
  • Maintaining reserves of stablecoins;
  • Issuance of crypto and other digital assets;
  • Acting as market makers or exchange or redemption agents;
  • Participate in blockchain and distributed ledger-based settlement or payment systems, including performing node functions; and
  • Related activities such as research activities and loans.

In explaining the background to FIL-16-2022, the FDIC cites various concerns regarding the risks of cryptographic activities, including security and soundness and anti-money laundering; financial stability and “systemic risks to the financial system”; and consumer protection issues. The agency also explains that due to the nature of crypto-related activities and the fact that this field is rapidly changing, it believes that the agency should assess activities on an individual basis. The letter notes that supervised institutions “are able to demonstrate their ability to conduct crypto-related activities in a safe and sound manner.”

The FDIC previously included cryptoasset risk assessment in its list of 2022 priorities (see WBK’s previous coverage of 2022 priorities here). The OCC issued an interpretative letter in November 2021 that required a national bank or federal savings association to notify its supervisory office of its intention to engage in certain cryptocurrency, distributed ledger and stablecoins, discussed in the letter.


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