FDIC Leader Slams Crypto Policies
FDIC Vice Chairman Travis Hill has criticized the federal agency’s past actions to restrict banks’ involvement in cryptocurrency activities.
He said these measures, including the use of “pause letters”, have hindered innovation and created the impression that regulators are holding back blockchain development.
Call for an end to restrictive banking practices such as Operation Choke Point
Hill urged an end to practices like Operation Choke Point and called for changes in how the Bank Secrecy Act is enforced. He stressed the need to ease pressure on banks to close accounts, fearing severe penalties for non-compliance.
He also expressed support for better cooperation with the cryptocurrency industry.
in a speech In an article published on Friday, Hill recommended that the FDIC take a more open approach to digital assets. He stressed the need for clearer guidelines on how banks should Use cryptocurrencies safely.
Hill, who has served as vice chairman since 2022, is expected to serve as acting chairman of the agency, which insures U.S. bank deposits.
“There is a healthy balance between (1) allowing banks to evolve with the times and (2) ensuring that banks continue to prudently manage risks, and the FDIC has done a poor job of achieving that balance in recent years,” he said.
His comments come as the cryptocurrency industry raises concerns about excessive regulation. Coinbase sues FDIC In June, it accused the agency of trying to sever ties between banks and the cryptocurrency industry.
The lawsuit also seeks Visit “Pause Letters,” claims these actions unfairly target the industry.
Push for clearer cryptocurrency guidance
The 2023 report of the FDIC Office of Inspector General shows that between March 2022 and May 2023, Agency sends “pause letters” to multiple banks. The letters asked the bank to cease cryptocurrency-related activities while providing more information for review.
The report highlights the lack of clear standards Handle digital assets.
Hill criticized the shift toward handling encryption cases on an individual basis, rather than providing transparent and consistent guidance.
He also talked about comparisons with 2013 Department of Justice initiative called Operation Choke Point. The move targets industries such as payday loans and firearms, restricting their access to banking services.
“While taking a new approach to digital assets and ending any and all chokepoint-like strategies are critical first steps, regulators also need to re-evaluate our approach to enforcing the Bank Secrecy Act (BSA),” Hill said.
Cryptocurrency advocates use the term “Operation Chokepoint 2.0” to describe regulators’ covert efforts to quarantine the cryptocurrency industry.
Documents obtained by Coinbase It is recommended that the FDIC discourage banks from participating in crypto businesses under the guise of managing reputational risk.
“While our shared goal is to ensure that criminals and terrorists do not exploit the banking system to fund drug trafficking, terrorism and other serious crime, the current BSA regime creates incentives for banks to close accounts rather than face hefty fines for insufficient BSA .Compliance,” the FDIC Vice Chairman further elaborated.
Industry leaders including Cardano founder Charles Hoskinsoncalled for unity against what they said were radical debanking measures. The controversy has also attracted the attention of politicians. The New Cryptocurrency Czar David Sacks Vows to tackle so-called banking constraints For cryptocurrency businesses.
Disclaimer
follow trust project BeInCrypto is committed to fair and transparent reporting. This news article is designed to provide accurate and timely information. However, readers are advised to independently verify the facts and consult a professional before making any decisions based on the content of this article. Please note that our terms and Conditions, privacy policyand Disclaimer Updated.
