The Office of the Comptroller of the Currency (OCC) has confirmed that national banks may engage in riskless principal transactions for crypto-assets, extending a decades old securities market practice to digital assets. However, the 9 December interpretive letter leaves significant risks unaddressed, particularly around settlement finality, unregulated counterparties and cross border exposures.
In a riskless principal transaction, an intermediary purchases an asset from one party for immediate resale to another, with the first purchase conditioned on an offsetting order. The intermediary takes title momentarily but assumes minimal market risk because both legs execute…
