State Regulatory Exams Commence

November 22, 2022

Last week, in the wake of FTX, Genesis, Gemini, and others, my trust company received notice of regulatory examination by one of the many states we are licensed in. 

Awesome! {{{huge applause}}}

Naturally all states should go after crypto-exchanges, lenders, pseudo-custodians and other entities operating solely with money-transmitter licenses…immediately…to see what they are doing with customer assets they carry on their balance sheets. 

They should also be examining all banks and trust companies who have affiliated/owned entities engaging in crypto exchange or lending businesses. Coinbase has admitted it carries customer cash and crypto on it’s exchange balance sheet instead of putting everything at its trust company, where assets cannot be on balance sheet and are protected from misuse and from third-party creditors. We’ve already seen reports of Gemini having trouble due to their lending operations (and they own a trust company), and we’re hearing rumblings about other trust companies and banks with affiliated crypto lending operations.

Okay federal & state regulators, get out there and look under the hood.

Fortress Trust, of course, has no affiliated lending or exchange operations. No assets are removed from the trust and put on the balance sheet of any other entity…ever. And I’ve assembled the perfect team for this, including…

  • My CEO, Albert – former Banking Commissioner
  • My head of state licensing & regulatory affairs, Joe – former Banking Commissioner (yes, that’s 2 on my team)
  • My Chief Regulatory Officer, Amanda – former Deputy Banking Commissioner
  • My Chief Trust Officer, Tony – attorney, former CEO of BitGo Trust, and holder of pretty much every trust certification in existence
  • My President/COO, Tom – career banking executive

So bring on the multi state regulatory exams. We’re built for this. And it’s fantastic to see the state banking regulators getting out there and engaging with their licensees! The industry needs this, especially now. Lets clean things up and protect consumers.


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