Stablecoin issuer and crypto services firm Paxos has filed to become a federally-regulated bank in the U.S.
The bank would operate out of New York (where Paxos is already located), according to the filing. The company, which already has a New York trust charter and a slew of licenses, currently offers cash custody, gold custody, cryptocurrency services, digital asset issuance, securities clearing, commodities trading and other services.
Notably, the firm’s crypto brokerage offering was tapped by PayPal earlier this year to power the payments giant’s cryptocurrency service.
“U.S. law is organized at both a state and federal level. The national charter was designed expressly to allow banks to conduct business across state lines more easily. This flexibility allows a young company like Paxos to focus resources on building great products. A national Trust Bank charter provides us with flexibility to operate across the U.S. while continuing to adhere to the highest regulatory standards,” general counsel Dan Burstein said in a blog post.
As with BitPay, the application will see a 30-day comment period as the next step in the process before it can proceed, though there’s no guarantee it will be granted. However, Acting Comptroller Brian Brooks has said in public statements he would like to see fintech firms – like crypto companies – secure federal charters so they can more easily operate across the country.
Anchorage filed early last month for a federal charter, though the status of this application is unclear.
If approved, these companies would join Kraken and Avanti as some of the first crypto-native banks in the U.S., though the latter two secured state charters from the Wyoming Division of Banking, rather than go the federal route.
Man Gets 6 Years for $25M Diamond and Crypto Ponzi Scheme
A South Florida federal district judge sentenced a Washington, D.C., man to six years in federal prison for operating a $25 million diamond investment scheme that included a crypto component. He must also pay over $23 million in victim restitution.
The accused, Jose Angel Aman, and his partners were sentenced by U.S. District Judge Rodolfo A. Ruiz II of the Southern District of Florida for soliciting funds from people in the United States and Canada for purported diamond contracts.
Aman and his partners promised investors the money was safe and backed by an inventory of actual diamonds, the U.S. Department of Justice (DOJ) said, but Aman “rarely used investors’ money to purchase, cut and resell rough diamonds. Nor did Aman have a $25 million diamond inventory.”