Written by Pete Schroeder and Douglas Gillison
WASHINGTON (Reuters) – The top U.S. banking regulator has directed multiple financial institutions to suspend direct trading in cryptocurrencies in 2022 and 2023, according to a document released on Friday. It has been revealed that the government did not instruct virtual currency companies to stop providing banking services.
History Associates, Inc., a research firm hired by cryptocurrency exchange Coinbase, is suing the Federal Deposit Insurance Corporation to release 25 supervisory “cease and desist letters” it sent to unidentified banks. After filing the lawsuit, a judge ordered the Federal Deposit Insurance Corporation to provide the information.
The FDIC first made the letter public in December, but a judge ordered it to be resubmitted with more “subtle edits.”
The lawsuit is part of a campaign by Coinbase and other crypto companies to expose what they say was a concerted effort on the part of U.S. banking regulators to keep crypto companies out of the traditional financial system. be.
To counter those claims, the FDIC on Friday announced how regulators should evaluate inquiries from lenders considering trading crypto assets directly compared to providing banking services to crypto companies. It also released a 2022 internal memo detailing the
These documents provide a valuable glimpse into the confidential banking supervision process. They suggested that while FDIC examiners were wary of the sector, which has been plagued by fraud, bankruptcies, and volatility, they did not order banks to completely shut down the sector. There is.
The document comes weeks before the incoming administration of President-elect Donald Trump is expected to announce the outline of a wide-ranging review of crypto policy. President Trump is expected to issue an executive order directing banking regulators to ease the sector as early as Inauguration Day, Jan. 20.
Several of the FDIC’s letters indicate that staff have directed banks to suspend participation in crypto initiatives or refrain from further expanding crypto services for their customers. In other cases, the FDIC has required banks to answer detailed questions before proceeding further with crypto ventures.
Meanwhile, the internal memo distinguishes between banks that directly engage in crypto activities, such as custody of crypto assets, and banks that provide traditional banking services to crypto customers, such as providing loans and deposit accounts. The first category requires more rigorous scrutiny, he said.
The memo comes after FDIC Chairman Martin Gruenberg told reporters in December that while the FDIC does not “debunk” crypto companies with respect to access to bank accounts, banks’ direct involvement in cryptocurrencies is subject to “supervision.” This reflects the comment that said, “It is the subject of caution above.”
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“Crypto-related activities can pose significant safety and soundness and consumer protection risks, as well as financial stability concerns,” the memo said, adding that such risks remain ” It’s evolving,” he added.
(Reporting by Pete Schroeder and Douglas Gillison; Editing by Michelle Price and Chizu Nomiyama)
