US regulators' crypto approach defended by watchdog group
A Wall Street watchdog group is challenging claims that U.S. regulators are unfairly targeting cryptocurrency firms, amid debates over "Operation Choke Point 2.0."
In advance of a House Financial Services Committee (HSFC) hearing on February 6, Better Markets banking policy director Shayna Olesiuk issued a written statement addressing allegations that U.S. government entities are attempting to debank crypto firms.
Olesiuk suggested the Federal Deposit Insurance Corporation (FDIC) was responding to fintech companies "making false and misleading statements" concerning deposit insurance coverage.
The HSFC hearing was prompted by assertions from some crypto industry executives that they had been cut off from traditional banking services due to their involvement with digital assets.
In 2022, the FDIC reportedly sent letters to banks suggesting they "paus[e] all crypto asset-related activity."
Olesiuk noted that 22 of the letters sent by the FDIC to crypto firms starting in 2022 were non-binding warnings about potential enforcement action.
"The current banking rules put limits on the amount of information on the reasons for a bank account closure that can be shared publicly," Olesiuk explained.
"If banks were required to specify the reason for an account closure, however, there would be less chance of misunderstanding or jumping to conclusions about malicious intent or discrimination when an account is closed," she further stated.
Coinbase chief legal officer Paul Grewal and MARA CEO Fred Thiel submitted written statements for the February 6 hearing, alleging that the FDIC responded with regulatory overreach and a lack of transparency.
The hearings in both the House and Senate followed the FDIC, under acting chair Travis Hill, releasing 790 pages of correspondence between the federal agency and financial institutions with crypto clients.
Additional letters were released in December 2024 by a U.S. District Court in response to a Freedom of Information Act lawsuit led by Coinbase.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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