Four Republican senators, led by Bill Hagerty, have raised concerns over the ideological motivations behind recent regulatory moves regarding cryptocurrency. They urged the agencies to avoid repeating the “mistakes” of Operation Choke Point, which they claimed unfairly targeted specific industries.
The senators are addressing Federal Reserve Board Chair Jerome Powell, Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg, and Office of the Comptroller of the Currency (OCC) Acting Comptroller Michael Hsu.
Therefore, they expressed their apprehension regarding the agencies’ statements on heightened supervision that have resulted in unfavorable consequences for the cryptocurrency sector, such as the closure of crypto firms’ bank accounts.
The senators referred to the joint statement released by those agencies on Jan. 3 that holding or issuing crypto-assets as principal is likely incongruent with safe and prudent banking practices.
They also pointed to a February Fed policy statement referencing crypto, stating Banking activity requires more than just legal permission; it is a necessary but insufficient condition. Additionally, the Biden administration’s January “road map” called for agencies to “ramp up enforcement.”
Concerns Over Coordinated Behavior
This coordinated behavior seems disturbingly reminiscent of Operation Choke Point,” the senators wrote, referring to the Obama-era operation in which federal regulators pressured financial institutions to cut off financial services to specific licensed, legally operating industries simply because certain regulators and policymakers disfavored those industries.
The senators posed several questions to the regulators, asking how their increased supervision would benefit Do the regulators believe that increased control will help consumers? Also, is it feasible for banks to offer services to crypto firms under the revised guidelines? Will the agencies issue comparable advice for other sectors? Advice for different industries.
The senators are joining a conversation in the crypto community concerning the voluntary liquidation of Silvergate Bank. This talk may heat up with the FDIC’s closing of Silicon Valley Bank.
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However, the senators’ letter signals a broader concern among Republicans regarding the Biden administration’s approach to cryptocurrency. It highlights the potential impact of regulatory overreach on legal sectors beyond the crypto industry.
In conclusion, the Republican senators’ letter raises valid questions about the motivations behind recent regulatory moves in the cryptocurrency sector and highlights concerns over potential regulatory overreach.
Moreover, It remains to be seen how federal banking regulatory agencies will respond to these concerns and what impact their policies will have on the crypto industry and other legal sectors.