June 8, 2026
Jonathan V. Gould
Comptroller of the Currency
Office of the Comptroller of the Currency
400 7th St., SW
Washington, DC 20219
Via electronic mail: LicensingPublicComments@occ.treas.gov
RE: Public Comment Letter in Opposition to Payward, Inc.’s National Trust Bank Charter Application (2026-Charter-344995)
Dear Comptroller Gould,
The National Community Reinvestment Coalition (NCRC) opposes the application by Payward, Inc. doing business as Kraken (Payward/Kraken), for a national trust bank charter under the name Payward National Trust Company (PNTC).
NCRC is a coalition of more than 700 community-based organizations fighting for a just economy. For nearly 30 years, we have worked to create opportunities for people and communities to build and maintain wealth. NCRC members include community reinvestment organizations, community development corporations, local and state government agencies, faith-based institutions, fair housing and civil rights groups, minority and women-owned business associations, and housing counselors from across the nation.
Payward/Kraken is seeking a national trust bank charter for the proposed PNTC to provide services related to digital assets, including custodial services for institutional and individual clients, such as safekeeping, recordkeeping, and settlement services.[1] In addition, it proposes that PNTC support “staking, trading activities, collateral management and other activities, either directly through PNTC or indirectly through a Payward affiliate.”[2]
NCRC opposes the grant of national trust bank charters to companies engaged in cryptocurrency activities for several reasons, including: (1) doing so stretches the national trust bank charter beyond its statutory purpose and the National Bank Act and (2) it would encourage regulatory arbitrage, resulting in the loss of community reinvestment, harm to consumers, and a lack of oversight and accountability. Granting a national trust bank charter to PNTC also will pose risks to the safety and soundness of the financial system, because Payward/Kraken has a demonstrated history of failing to meet legal compliance requirements. It would allow a cryptocurrency exchange under the guise of a bank to provide custodial, record keeping, and settlement services for digital assets without adequate safeguards in place.
1. The OCC does not have authority to issue national trust bank charters to crypto exchanges such as Payward/Kraken.
The OCC charters national banks under the authority of the National Bank Act of 1864, as amended.[3] Under the Act, the OCC’s grant of trust charters is limited to institutions engaged in fiduciary activities.[4] Specifically, section 92a authorizes the OCC to issue a special permit allowing a national bank to act as a “trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, or in any other fiduciary capacity,” in which competing State-chartered institutions are permitted to act under state law.[5] Section 27(a) allows the OCC to require a national bank’s activities to be limited to those of a trust company.[6] Courts have held that the activities of a trust company referenced in Section 27(a) are defined by the activities outlined in section 92a.[7] Thus, trust companies are only authorized to engage in fiduciary activities.[8]
Payward/Kraken’s application is short on details, but it seeks authority to engage in nonfiduciary duties. It states that PNTC will enable it to offer its products and services, including “an online digital asset platform . . . that enables clients to buy and sell digital assets” and other trading platforms and staking services.[9] Although it also states several times that it will engage in custody services and act as a fiduciary, the nature of its proposed “fiduciary” services is unclear because a fiduciary is legally bound to manage another person’s money and property for the benefit of the other person, even when contrary to the fiduciary’s own interests.[10] Here the proposed services PNTC will provide, such as staking, trading and collateral management, seem at odds with it acting as a true fiduciary and PNTC will not undertake them as a fiduciary.
Moreover, these activities are profit centers for Payward/Kraken. For example, in simple terms, staking involves Kraken acting as an intermediary/validator — it aggregates funds from users and “stakes” them on the blockchain as way to secure the network.[11] The network, in turn, pays rewards that Kraken passes on to the user, after taking a percentage for itself.[12] These services will not be provided “through bona fide fiduciary accounts that require providers to fulfill fiduciary duties of care, prudence, skill, utmost good faith, and undivided loyalty.”[13]
Because PNTC’s proposed activities are not fiduciary in nature, they are inconsistent with the purposes of the National Bank Act[14] and the OCC would be exceeding its statutory authority if it were to grant Payward/Kraken’s national trust bank charter application.
2. If the trust bank charter is granted, PNTC would engage in core banking activities, such as holding deposit accounts, without corresponding safeguards.
Payward/Kraken states that it will not “directly offer traditional retail banking products, such as deposit accounts.”[15] Yet, it also indicates that fiat transactions will move in and out of PNTC[16] (presumably through customer accounts). Inflows and outflows of funds to and from accounts sound quite like bank deposit and withdrawal activity. As does its proposed “seamless financial ecosystem in which customers can access and manage digital assets alongside national currencies[.]”[17]
By providing such deposit-like accounts, PNTC would be engaging in core bank functions but as a “non-insured national trust company,” these deposits would not be FDIC insured.[18] Granting a national trust bank charter would allow PNTC to act as a full-service bank but without the corresponding safeguards, such as deposit insurance or other resolution mechanisms for consumers when traditional banks fail. Although trust banks are not FDIC-insured, the “national bank” label could mislead consumers into expecting federal protection and expose them to avoidable harm.
A trust bank charter would convey the appearance of regulatory legitimacy and safety, something Payward/Kraken leans into when it describes its target audience as “customers seeking regulated, bank-level custody and trust services for digital assets.”[19] But, if PNTC gets a national trust bank charter, Payward/Kraken would not be subject to consolidated Federal Reserve supervision required of bank holding companies, [20] even though it would control PNTC as its sole owner.[21] This is especially troubling because Payward/Kraken is seeking to use PNTC to offer its products and services in a “seamless . . . financial ecosystem.”[22]
3. If the charter application is approved, PNTC would avoid obligations justifying the privileges granted to full-service banks, creating regulatory arbitrage that harms communities and consumers.
A national trust charter would provide PNTC with the reputational benefits, enhanced market credibility, and federal regulatory status of a banking institution while allowing it to avoid many of the fundamental obligations that justify such privileges. This arrangement would create dangerous imbalances in four areas: community investment responsibilities, consumer protection, regulatory oversight and accountability, and systemic risk management. Any form of national bank charter is a privilege, accompanied by obligations to communities and consumers. Approving the application of Payward/Kraken would create a two-tier system where digital asset firms receive comparable federal status without comparable public obligations, undermining the integrity of the entire chartering framework.
3.1. Lost Reinvestment to Communities and the Need for Community Development Obligations
National trust banks are not subject to Community Reinvestment Act (CRA) requirements, meaning granting a national trust bank charter to PNTC would grant it the prestige and benefits of a federal charter without any obligation to serve low- and moderate-income communities or meet local credit needs. While traditional banks must demonstrate how they reinvest deposits back into their communities, PNTC would face no such requirement, even though it would be holding deposit or deposit-like accounts for consumers. Granting trust bank charters to cryptocurrency exchanges will give the patina of legitimacy to them without the same obligations to serve the public.
Banks that benefit from federal deposit insurance must meet the credit needs of entire communities, meaning that banks cannot solely serve the wealthiest customers. They must serve the needs of low- and moderate-income households as well. Traditional deposit insurance is a form of public subsidy to the banking industry in exchange for which banks accept obligations to serve the public interest.
Bank deposits fuel community development. A recent report indicated that stablecoins could divert around $500 billion of potential deposits from US banks by the end of 2028.[23] Issuance of a trust charter to PTNTC would legitimize diverting potentially billions of dollars from community bank deposits into cryptocurrency held by an entity with no corresponding community reinvestment obligation. This diversion of capital away from entities with a community reinvestment obligation represents a fundamental departure from the principle that federally chartered institutions should serve public purposes, not merely private profit.
The absence of community development requirements for cryptocurrency exchanges means communities will lose billions of dollars of needed community and economic development projects and initiatives. In 2023 alone, banks originated over $126 billion in loans that meet the CRA’s definition of community development for LMI communities and households.[24]
Considering this, cryptocurrency firms should be required to reinvest a portion of their proceeds into community development projects in underserved communities. Ensuring community development conditions are being met would also allow for a more level playing field between banks, especially between community banks, and nonbank or national trust banks. Traditional banks are regularly supervised for their compliance with the CRA. If subject to similar requirements, cryptocurrency firms could also be held accountable for meeting their community investment obligations through a supervisory process. In the absence of community reinvestment requirements, no cryptocurrency firms should receive any form of bank charter. They should not be allowed to avoid CRA requirements, while relying on a supervisory regime that might assure or convey to consumers that cryptocurrency exchanges are a sound way to store and transfer funds.
3.2. Threat of Consumer Harm
As noted in several comment letters submitted by NCRC to the OCC, granting a national trust bank charter to cryptocurrency and stablecoin companies threatens to harm consumers on multiple levels. Fraud, hacking, and cybercrime plague the digital asset ecosystem, with billions of dollars in losses annually. The current regulatory framework governing cryptocurrency and stablecoins fails to prevent massive fraud and financial losses. US consumers are losing billions of dollars a year to fraud, with stablecoins overtaking Bitcoin as the illicit currency of choice for criminals — stablecoins now account for 63% of all illicit crypto transactions.[25]
The Kraken platform is not immune from these frauds and scams – for example, in 2025 scammers engaged in a prevalent phishing scam where they sent out fake emails pretending to be Kraken.[26] Other examples include:
- In June 2024, a security researcher exploited a flaw in its platform to steal $3 million in assets.[27]
- In February 2026, Kraken reported that 2,000 client accounts were accessed in an insider-related extortion attempt.[28]
- In May 2026, Payward/Kraken sued Etana for misappropriating $25 million in its customer reserves.[29]
As of February 2026, the Consumer Financial Protection Bureau’s consumer complaint database had 492 complaints against Payward/Kraken – almost half of which relate to fraud or scam claims.[30] Forty-four percent relate to unauthorized transactions, account takeovers, and the inability to recover stolen funds.[31] Other complaints relate to transaction issues, money not being available when promised, poor customer service, and confusing or missing disclosures.[32]
A report by the International Consortium of Investigative Journalists (ICIJ) found routine use of brand-name crypto exchanges by money launderers, including Kraken.[33] The ICIJ-led cross-border investigation with 37 media partners in 35 countries reveals how crypto and stablecoin companies provide the tools that criminals exploit to launder the proceeds of scams, theft, and other crimes — while those who have lost their savings or livelihoods are left with little hope of justice. ICIJ found that some Kraken account holders used their accounts in a large-scale Russian money laundering operation to exchange cryptocurrency for traditional cash. It found that these money launderers also moved money to organized crime groups, ransomware actors, and even Russian spy operations. The findings raise questions about whether Paward/Kraken is doing enough to stop illicit flows, either by freezing funds, closing accounts, or carefully monitoring suspicious transactions.
Recent federal and state data underscore the scale of the threat posed by crypto-kiosk fraud. The Federal Trade Commission reported that consumers lost over $65 million to Bitcoin ATM scams in the first half of 2024, with a median individual loss of $10,000, and that older adults were several times more likely to be targeted.[34] FinCEN and multiple state attorneys general have documented that kiosks have been used to launder “millions” in criminal proceeds, prompting a wave of new state laws imposing transaction caps, disclosure mandates, refund rights, and operator registration requirements.
The consumer complaints directly relate to the type of services Payward/Kraken intends to offer as a national trust bank. Given the prevalence of fraud in the cryptocurrency ecosystem and the substantial risk of harm to customers, the OCC should deny Payward/Kraken’s trust bank charter application.
3.3. Risks to Safety and Soundness
Within the past five years, Payward/Kraken has been the subject of separate enforcement actions by the two agencies that, if the Clarity Act bill is implemented, will be responsible for regulating the cryptocurrency market – the Securities Exchange Commission (SEC) and the Commodities Future Trading Commission (CFTC). In September 2021, the CFTC fined Payward/Kraken $1.25 million for illegally offering “margined retail commodity transactions in digital assets” to US customers without registering properly.[35] In addition to the penalty, the order required Kraken to cease and desist further violations of the Commodity Exchange Act.[36]</p?
In February 2023, Payward/Kraken settled with the SEC for $30 million in penalties.[37] The agency alleged that Payward/Kraken through its platform services acted as an exchange, broker, dealer, and clearing agency without registering with the SEC. The SEC alleged that as an unregistered securities offering, its crypto staking-as-a-service program denied investors significant protections.[38] The complaint also alleged that Payward/Kraken’s “deficient internal controls and poor record keeping practices present[ed]” risks to its customers. For example, the SEC alleged Payward/Kraken commingled its customer’s money and crypto assets with its own and even paid operational expenses directly from accounts that held customer cash. Payward/Kraken agreed to pay the penalties and cease offering its asset-staking services for retail customers.[39]
Maintaining adequate internal controls and record keeping are basic requirements of any business but they are essential for national trust bank charter holders who are supposed to be fiduciaries and custodians of assets. Payward/Kraken’s past commingling of customer funds and digital assets with its own operating funds should disqualify it from receiving a national trust bank charter. Equally disqualifying is its role in illicit finance described above.
Payward/Kraken’s proposed banking operations would extend the federal safety net to a company whose core business involves highly volatile digital assets. Cryptocurrency platforms pursue profit-driven business models that are uniquely susceptible to destabilizing runs in the absence of rigorous reserve, redemption, and risk-management standards.[40] Historically, in the US, bright lines have existed to separate banking from commerce. The separation of banking and commerce is critical to maintaining the safety and soundness of our financial system. Granting a national trust bank charter here would contradict that principle. If Payward/Kraken receives a charter, regulators will have little insight into its corporate parent’s operations even though it and the PNTC have many interdependent relationships – compounding the systemic risks that cryptocurrency already pose to the US economy.
Conclusion
NCRC strongly urges the OCC to cease issuing national trust bank charters to cryptocurrency companies because it exceeds its statutory authority and also affords such companies with the benefits of being a national bank but with none of the community investment requirements.
Granting Payward/Kraken’s application for a national trust bank charter would enable regulatory arbitrage, reduce investment into community development, risk significant harm to consumers and communities, and create systemic risk. We urge the OCC to deny Payward/Kraken’s application.
Thank you for considering this request. If you have any questions about this letter, please contact me at 202-464-2709 or jvantol@ncrc.org or NCRC’s Policy Director Tara Flynn at tflynn@ncrc.og.
Sincerely,
Jesse Van Tol
President and CEO
National Community Reinvestment Coalition (NCRC)
[1] Application to the Office of the Comptroller of the Currency to Organize Payward National Trust Company (Public Volume) 5 (May 8, 2026) (hereinafter Payward/Kraken Application).
[2] Id.
[3] National Bank Act of 1864, 12 U.S.C. §§ 1 et seq.
[4] Recent amendment by the OCC to the National Bank Act’s implementing regulation (12 CFR 5.20(i)) does not change the meaning of the statute or the limited nature of the national trust bank charter. The OCC announced the amendments on March 3, 2026. See Office of the Comptroller of the Currency, OCC Bulletin 2026-6 (Mar. 3, 2026), https://www.occ.treas.gov/news-issuances/bulletins/2026/bulletin-2026-6.html (announcing amendments to 12 CFR 5.20(i)).
[5] 12 U.S.C. § 92a (emphasis added).
[6] 12 U.S.C. § 27(a).
[7] Nat’l State Bank v. Smith, 591 F.2d 233 (3d Cir 1979).
[8] Arthur E. Wilmarth, Jr., Policy Brief: the OCC Has Violated Four Federal Statutes by Allowing National Trust Banks to Engage in Crypto-Related Nonfiduciary Activities, Including the Issuance of Stablecoins 26 (George Washington University School of Law Apr. 2026), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6789822. [hereinafter Wilmarth Article].
[9] Payward/Kraken Application at 4.
[10] See Consumer Fin. Prot. Bureau, What is a Fiduciary?, https://www.consumerfinance.gov/ask-cfpb/what-is-a-fiduciary-en-1769/.
[11]Allie Grace Garnett, What is CryptoCurrency Staking, Britannica Money, www.britannica.com.
[12] See Kraken Staking Review, HowToStakeCrypto, howtostakecrypto.com/platforms/kraken.
[13] Wilmarth Article at 3.
[14] Payward/Kraken Application, at 6. Payward/Kraken indicates that it has conducted an analysis of the permissibility of its proposed activities under the National Bank Act. However, this analysis is not available as part of the public record. Because of the importance of the analysis, it should not be afforded confidential treatment.
[15] Payward/Kraken Application at 5.
[16] Id. at 6.
[17] Id. at 4.
[18] Id. at 4.
[19] Id. at 5.
[20] 12 U.S.C. § 1844(c).
[21] Payward/Kraken Application at 5.
[22] Id. at 4.
[23] Hannah Long, U.S. Banks May Lose $500 Billion to Stablecoins by 2028, Standard Chartered Warns, Reuters (Jan. 27, 2026), https://www.reuters.com.
[24] Fed. Fin. Inst. Exam Council, Findings from 2023 Data Fact Sheet (Nov. 12, 2025), https://www.ffiec.gov/data/cra/findings-from-2023-data-fact-sheet.
[25] Chainalysis, 2025 Crypto Crime Report (Jan. 15, 2025), https://www.chainalysis.com/blog/2025-crypto-crime-report-introduction/.
[26] Kraken CSO Warns of Scam Emails Posing as Exchange, CryptoNewZ, (Aug. 5, 2025), www.cyptonewz.com.
[27] Ravie Lakshmanan, Kraken Crypto Exchange hit by $3 Million Theft Exploiting Zero-Day Flaw, The Hacker News (Jun. 19, 2024), https://thehackernews.com.
[28] Estefano Gomez, Kraken Says Insider Related Incidents Affected 2,000 Client Accounts, But No Funds Were at Risk, Crypto Briefing (Apr. 13, 2026), cryptobriefing.com.
[29] Kraken’s Parent Company Payward Alleges $25 million in Crypto Custody Fraud in Lawsuit against Etana and Firm’s CEO, CoinDesk (May 4, 2026), www.coindesk.com.
[30] Steve Rhode, Kraken has 492 CFPB Complaints – 44% Are Fraud Claims, Get out of Debt Guy, (Feb. 17, 2026). www.getoutofdebt.org.
[31] Id.
[32] Id.
[33] Int’l Consortium of Investigative Journalists, About Coin Laundry investigation: Cryptocurrency, (Nov. 17, 2025), https://www.icij.org/investigations/coin-laundry/about-coin-laundry-investigation-cryptocurrency/.
[34] Fed. Trade Commission, New FTC Data Shows Massive Increase in Losses to Bitcoin ATM Scams, (Sept. 3, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/09/new-ftc-data-shows-massive-increase-losses-bitcoin-atm-scams.
[35] CFTC, CFTC Imposes a $1.25 Million Penalty against Kraken for offering Illegal Off-Exchange Digital Asset Trading and Failing to Register as Required, Release Number 8433-21 (Sept. 28, 2021), www.cftc.gov/PressRoom/PressReleases/8433-21).
[36] Id.
[37] Complaint, SEC v. Payward, Inc. and Payward Ventures, Inc. (d/b/a Kraken), No. 3:23-cv-06003-WHO (N.D. Cal filed Nov. 20, 2023), www.sec.gov/enforcement-litigation/litigation-releases/lr-25896.
[38] Id.
[39] The SEC dropped its action against Payward/Kraken in 2025. Emma Kinery, SEC Drops Case Against Kraken in Latest Crypto Reversal, Am. Banker (Mar. 28, 2025), www.americanbanker.com.
[40] Fin. Stability Oversight Council, 2024 Annual Report at 8 (U.S. Dep’t of the Treasury 2024). 2024), https://home.treasury.gov/system/files/261/FSOC2024AnnualReport.pdf.
