We advised a national bank in securing a milestone precedent relating to holding crypto-assets as principal

Davis Polk advised a national bank in successfully receiving guidance from the OCC regarding the permissibility of certain crypto-asset activities. In response to a request on our client’s behalf, the OCC issued Interpretive Letter 1186, which confirms our legal analysis regarding the authority of a national bank to pay network fees (i.e., “gas fees”) on blockchain networks to facilitate otherwise permissible activities and hold, as principal, amounts of crypto-assets on balance sheet necessary to pay network fees for which the bank anticipates a reasonably foreseeable need. The OCC also confirmed that a national bank may hold amounts of crypto-assets as principal necessary for testing otherwise permissible crypto-asset-related platforms, whether internally developed or acquired from a third party. The OCC Interpretive Letter marks an important step in the banking agencies’ efforts to bring crypto-asset activities into the regulatory perimeter.

The Davis Polk financial institutions team included partner David L. Portilla, counsel Andrew S. Baer and associate Justin Levine. Members of the Davis Polk team are based in the New York and Washington DC offices.

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