Introduction: House Republicans Request Clarity on Crypto De-banking
The US House Financial Services Committee’s Republican members seek transparency concerning the de-banking of various cryptocurrency businesses. On April 25, three Republican representatives sent letters to the heads of US banking regulatory agencies, demanding information about any possible coordinated actions against digital asset firms.
Recipients of the Letters: Regulatory Agencies in the Spotlight
The letters were addressed to Federal Deposit Insurance Corporation (FDIC) chair Martin J. Gruenberg, Federal Reserve System chair Jerome Powell, and Office of the Comptroller of the Currency (OCC) acting comptroller Michael J. Hsu. The letters, which were identical in content, requested personalized access to each agency’s records.
References to Operation Choke Point: A History of Targeted De-banking
The letters began by invoking the Obama Administration’s Operation Choke Point, which allegedly urged banks to shun some enterprises. The authors then warned of a “resurgence of coordinated action” by the federal prudential regulators to stifle innovation in the US, with the digital asset ecosystem bearing the brunt of the onslaught.
Examples Cited by Lawmakers: Crypto Industry Not Inherently Risky
The letters’ authors, Reps. Patrick McHenry, Bill Huizenga, and French Hill cited OCC Interpretive Letter 1179, FDIC’s April 2022 letter, and the joint statement issued by the three agencies in January as examples. The trio argued that, despite the crypto industry’s “run-of-the-mill fraud,” digital asset activity is not inherently risky.
Alleged Coordinated Plot: Suppressing Digital Assets in the US
Moreover, the lawmakers allege that the Fed, FDIC, and OCC’s actions do not stem from recent events or a sudden urge to protect financial institutions from risky behavior. Instead, they imply that there is a coordinated plot to shun the digital asset ecosystem in the US.
Demand for Non-public Records: Seeking Transparency in Communications
The lawmakers demand non-public records about communications between the agencies’ staff and the institutions they oversee, specifically those referenced in the documents. The Republican representatives seek to uncover any coordinated efforts to stifle the growth of the digital asset industry in the US.