Four Republican United States senators led by Bill Hagerty have written a letter to the heads of federal banking regulatory agencies questioning the ideological motivation behind recent cryptocurrency regulatory moves. They compared the regulators’ policies to the Obama administration’s Operation Choke Point.
Senators address Jerome Powell, Chairman of the Federal Reserve Board, Marty Gruenberg, Chairman of the Federal Deposit Insurance Corporation (FDIC), and Michael Hsu, Acting Comptroller of the Office of the Comptroller of the Currency (OCC). The March 9 letter states that their agencies, as well as the White House, issued statements about heightened surveillance that led to unfortunate consequences for the cryptocurrency industry, such as the closure of crypto firms’ bank accounts. .
The senators were referring to the joint statement released by these agencies on January 3 which said in part: “The issuance or holding as principal of crypto-assets (…) is very likely to be inconsistent with safe banking practices. and healthy”. Additionally, they pointed to a Fed policy statement from February that saidspecifically referring to crypto, that “legal authorization is a necessary but not sufficient condition” for banking activity, and the Biden administration’s January “roadmap” that called on agencies to “step up ‘application”.
“This coordinated behavior appears disturbingly reminiscent of Operation Choke Point,” the senators wrote. In this operation, “Federal regulators have pressured financial institutions to cut off financial services to certain licensed and legally operating industries simply because certain regulators and policymakers have disadvantaged those industries.” They added:
“We are particularly concerned that the excessive behavior of banking regulators will inevitably spill over into other legal industries.”
The senators posed a number of questions to the regulators. They asked how their increased oversight would help consumers, whether it was possible for banks to provide services to crypto businesses under the updated guidelines, and whether agencies planned to issue similar guidelines for other industries. .
Related: Banks under pressure from US authorities to sever ties with crypto firms
With their letter, the senators join a conversation in the crypto community regarding the voluntary liquidation of Silvergate Bank. This discussion could intensify with the shutdown of Silicon Valley Bank by the FDIC.
Powell Hearing Today: US Senator Bill Hagerty said he will discuss cryptocurrencies as well as the Fed’s interest rate plans during the semi-annual monetary policy report hearing in Congress. Federal Reserve Chairman Jerome H. pic.twitter.com/xazQSFtK3p
—HappyMiner (@happyminerUS) March 6, 2023
The senses. Mike Crapo, Thom Tillis and Steve Daines were co-authors of the letter. Hagerty introduced the Digital Trading Clarity Act to the Senate in October. This law would provide a safe harbor for cryptocurrency exchanges against certain Securities and Exchange Commission (SEC) enforcement actions.