US Federal agencies outline key risks for banks eyeing crypto custody
One risk facing banks that custody crypto is the potential for liability if crypto assets are lost, according to three US financial agencies.
Three federal agencies of the United States government outlined the risks facing banks if they decide to custody crypto on behalf of their clients, according to a document published jointly by the agencies on Monday.
While the announcement said that the document “does not create any new supervisory expectations,” it could provide a framework for banks that are considering entering the crypto space, as some reports have suggested they are.
According to the document, titled “Crypto-Asset Safekeeping by Banking Organizations,” a bank’s risk assessment would include the ability to understand a complex and evolving asset class; the potential of liability if crypto assets were lost; and legal and compliance responsibilities associated with the Bank Secrecy Act and Anti Money Laundering regulations.
