The Rise and Fall of Protego’s Conditional Charter
Once a promising player in the cryptocurrency custodial space, Protego’s conditional national trust banking charter has officially expired. This development leaves the company scrambling for alternatives and raises eyebrows in an already tumultuous crypto banking sector.
What Went Wrong?
According to a spokesperson from the United States Office of the Comptroller of the Currency (OCC), Protego failed to meet crucial pre-conversion requirements. The OCC’s statement was clear: the company needed to demonstrate its operational standards, including solid policies, procedures, systems, and adequate capital and liquidity levels.
Timeline of Events
Protego’s journey toward a federal charter began in February 2021, when it received an 18-month conditional charter that could only be extended once. They were given until February 4, 2023, to meet conversion requirements. An unnamed source claimed that the firm had financing lined up in time, but it seems like a firm answer about their charter remained elusive.
Key Dates:
- February 2021: Protego receives an 18-month conditional charter.
- February 4, 2023: Deadline for conversion requirements.
- March 5-11, 2023: OCC bulletin confirms expiration of charter.
What’s Next for Protego?
With its charter expired, Protego’s options are limited. Founder Greg Gilman expressed confidence that the company had met the necessary requirements for financing. Now, they face a tough decision: either reapply to the OCC or take their chances with state authorities to operate as a state bank. Talk about a game of musical chairs!
Implications for the Crypto Sector
The failure of Protego’s charter not only signifies a significant setback for the company, but it also raises concerns for the broader crypto banking landscape. Currently, Anchorage Bank stands as the sole crypto firm holding a national banking charter, while Custodia Bank was recently denied access to the Federal Reserve System. It’s a tough time for cryptocurrency firms looking for traditional banking support.
In the ever-volatile world of crypto, Protego’s struggles offer a sobering reminder of the challenges faced by digital asset custodians.
