US senators write to banking regulators about potential crypto discrimination

Four United States Republican senators pb by Bill Hagerty person written a missive to the heads of national banking regulatory agencies questioning the ideological information down caller regulatory moves successful respect to cryptocurrency. They compared the regulators’ policies to the Obama administration’s Operation Choke Point.

The senators addressed Federal Reserve Board seat Jerome Powell, Federal Deposit Insurance Corporation (FDIC) seat Marty Gruenberg, and Office of the Comptroller of the Currency (OCC) acting comptroller Michael Hsu. The March 9 missive said that their agencies, on with the White House, person issued statements connected heightened supervision that person resulted successful unfortunate consequences for the cryptocurrency sector, specified arsenic the closing of crypto firms’ slope accounts.

The senators were referring to the associated connection released by those agencies connected January 3 that said successful part, “Issuing oregon holding arsenic main crypto-assets […] is highly apt to beryllium inconsistent with harmless and dependable banking practices.” In addition, they pointed to a February Fed argumentation connection that said, making circumstantial notation to crypto, that “legal permissibility is simply a necessary, but not sufficient, condition” for banking activity, and the Biden administration’s January “road map” that called for agencies to “ramp up enforcement.”

“This coordinated behaviour seems disturbingly reminiscent of Operation Choke Point,” the senators wrote. In that cognition “federal regulators applied unit connected fiscal institutions to chopped disconnected fiscal services to definite licensed, legally operating industries simply due to the fact that definite regulators and policymakers disfavored those industries.” They added:

“We are particularly disquieted that overreaching behaviour by the banking regulators volition inevitably bleed into different ineligible industries.”

The senators posed a fig of questions to the regulators. They asked however their accrued supervision volition assistance consumers, whether it is imaginable for banks to supply services to crypto firms astatine each nether the updated guidance and whether the agencies program to merchandise akin guidance for different industries.

Related: Banks nether unit from U.S. authorities to chopped ties with crypto firms

With their letter, the senators are joining a conversation successful the crypto assemblage concerning the voluntary liquidation of Silvergate Bank. That talk may heat up with the FDIC’s closing of Silicon Valley Bank.

Powell Hearing Today: US Senator Bill Hagerty said helium volition sermon cryptocurrencies on with the Fed’s involvement complaint plans astatine the proceeding connected The Semiannual Monetary Policy Report to the Congress. Federal Reserve Chairman Jerome H. pic.twitter.com/xazQSFtK3p

— HappyMiner (@happyminerUS) March 6, 2023

Sens. Mike Crapo, Thom Tillis and Steve Daines were coauthors of the letter. Hagerty introduced the Digital Trading Clarity Act successful the Senate successful October. That enactment would provide a harmless harbor for cryptocurrency exchanges from immoderate Securities and Exchange Commission (SEC) enforcement actions.