Four United States Republican senators led by Bill Hagerty have written a letter to the heads of federal banking regulatory agencies, questioning the ideological motivation behind recent regulatory moves in regard to cryptocurrency. They compared the regulators\u2019 policies to the Obama administration\u2019s Operation Choke Point.<\/p>\n
The senators addressed 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. The March 9 letter said that their agencies, along with the White House, have issued statements on heightened supervision that have resulted in unfortunate consequences for the cryptocurrency sector, such as the closing of crypto firms\u2019 bank accounts. <\/p>\n
The senators were referring to the joint statement released by those agencies on Jan. 3 that\u00a0said in part, \u201cIssuing or holding as principal crypto-assets [\u2026] is highly likely to be inconsistent with safe and sound banking practices.\u201d In addition, they pointed to a February Fed policy statement that said, making specific reference to crypto, that \u201clegal permissibility is a necessary, but not sufficient, condition\u201d for banking activity, and the Biden administration\u2019s January \u201croad map\u201d that called for agencies\u00a0to\u00a0\u201cramp up enforcement.\u201d<\/p>\n
\u201cThis coordinated behavior seems disturbingly reminiscent of Operation Choke Point,\u201d the senators wrote. In that operation, \u201cfederal regulators applied pressure on financial institutions to cut off financial services to certain licensed, legally operating industries simply because certain regulators and policymakers disfavored those industries.\u201d They added:<\/p>\n
\u201cWe are especially worried that overreaching behavior by the banking regulators will inevitably bleed into other legal industries.\u201d <\/p><\/blockquote>\n
The senators posed a number of questions to the regulators. They asked how their increased supervision will help consumers, whether it is possible for banks to provide services to crypto firms at all under the updated guidance, and whether the agencies plan to release similar guidance for other industries.<\/p>\n