USDCircle Wins OCC Trust Bank Approval Amid Scam-Recovery Dispute
Federal banking milestone comes as law enforcement officials question Circle’s handling of stolen USDC
TL;DR
- Circle received final OCC approval to establish Circle National Trust, a federally supervised national trust bank.
- Circle National Trust will initially serve Circle and its affiliates before potentially expanding to regulated institutions.
- Law enforcement officials and prosecutors have accused Circle of not doing enough to help scam victims recover stolen assets.
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Circle received final approval from the U.S. Office of the Comptroller of the Currency to establish Circle National Trust, a federally supervised national trust bank, giving the USDC issuer a deeper foothold in regulated U.S. financial infrastructure while law enforcement officials separately raised concerns about its handling of scam-victim recovery efforts.
The approval, released on July 10, 2026, allows Circle to operate a national trust bank that can provide custody and fiduciary services. Circle National Trust is not a full commercial bank and will not accept consumer deposits or make loans. Circle shares were 14% higher in pre-market trading after the approval, reflecting investor reaction to the company’s move closer to the U.S. banking system.
Circle said the new entity will first provide fiduciary digital asset custody services for Circle and its affiliates. Under the approved business plan, Circle National Trust may later expand custody services to a limited number of institutional customers, including banks and other regulated financial institutions. Circle also said the trust bank could eventually manage reserves backing USDC under OCC supervision, though that function is a future capability rather than an immediate launch feature.
Jeremy Allaire, Circle’s co-founder, chairman and CEO, framed the approval as a major step toward bringing blockchain-based financial infrastructure into the regulated system. “OCC approval to establish Circle National Trust marks a defining step,” Allaire said. He also said federal oversight creates a higher standard for Circle’s transparency, governance and ability to scale.
Circle moves from conditional approval to federal trust-bank status
Circle applied for the trust bank charter in June 2025 and received conditional approval six months later before obtaining final approval. The company’s move places Circle National Trust under direct federal oversight at a time when stablecoin issuers are seeking clearer access to regulated custody, reserve and banking infrastructure.
Circle’s trust bank timeline:
- Trust bank charter application: Circle applied in June 2025.
- Conditional approval: Circle received conditional approval six months after application.
- Final OCC approval: Circle received final approval on July 10, 2026, allowing Circle National Trust to operate.
Circle’s regulatory push comes as other crypto companies pursue federal charters and custody permissions. Crypto.com secured an OCC license in February to operate as a federally regulated crypto custodian bank. BitGo, Circle, Ripple, Paxos and Fidelity Digital Assets received similar conditional approvals in December. Kraken was also cited among crypto firms seeking federal charters, licenses and banking approvals.
USDC remains the second-largest U.S. dollar-pegged stablecoin, while Tether’s USDT remains the largest. Circle is pursuing a regulatory-first model as it competes in a stablecoin market where scale and access to regulated infrastructure have become major strategic issues.
Stablecoin market context:
- USDC: Issued by Circle, with about $73.2 billion in circulation. It is the second-largest U.S. dollar-pegged stablecoin.
- USDT: Issued by Tether, with about $184.1 billion in circulation. It remains the largest stablecoin.
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Law enforcement allegations create a separate pressure point
Circle’s banking approval arrived alongside allegations that the company has not adequately helped scam victims recover stolen funds. The International Consortium of Investigative Journalists said Circle allegedly declined to cooperate in assisting scam victims with fund recovery. Unnamed law enforcement officials also raised concerns about instances where Circle allegedly refused to freeze or recover assets suspected to be scam proceeds.
State prosecutors in southeastern Wisconsin recently filed a criminal complaint against Circle, alleging the company refused to comply with a warrant ordering it to recover a scam victim’s stolen assets. Circle responded that the complaint should be dismissed and reportedly called it meritless. The dispute centers on whether Circle acted properly when law enforcement sought help recovering assets linked to fraud.
Milwaukee County police detective Scott Simons said he has seen over a dozen instances around the U.S. in which Circle either refused a law enforcement request to freeze victim funds or a court order intended to force Circle to freeze funds failed because it arrived too late. His account presents the issue as broader than a single disputed warrant.
New York prosecutors also claimed in a letter to Congress that Circle failed to honor court orders seeking to reimburse victims. The prosecutors wrote that Circle’s financial motive “becomes crystal clear,” arguing that it may be “financially preferable” for Circle to freeze stolen crypto without returning the underlying asset to law enforcement or victims because Circle could continue collecting interest through investment of the underlying reserves.
Regulatory approval raises expectations for Circle’s role
Circle’s new trust-bank status strengthens its position inside the federal regulatory perimeter, but the scam-recovery allegations raise separate questions about how stablecoin issuers respond to stolen-asset cases. The tension is especially sensitive because Circle may later manage reserves backing USDC under OCC supervision while prosecutors are challenging how the company handles assets suspected to be tied to fraud.
The central distinction is between a confirmed regulatory approval and unresolved allegations from law enforcement officials and prosecutors. The OCC approval is final and gives Circle National Trust a defined federal status. The victim-recovery dispute remains contested, with prosecutors alleging noncompliance and Circle seeking dismissal of the Wisconsin complaint.
FAQ
What did Circle receive?
Circle received final OCC approval to establish Circle National Trust.
Will Circle National Trust take deposits?
No. The trust bank will not accept consumer deposits or make loans.
Who criticized Circle’s scam-recovery practices?
Law enforcement officials, state prosecutors, Scott Simons and New York prosecutors raised concerns.
How did Circle respond to the Wisconsin complaint?
Circle argued the complaint should be dismissed and reportedly called it meritless.
This article has been refined and enhanced by ChatGPT.
