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US Regulator ‘Inappropriate’ Urges Banks to Avoid Serving Crypto Firms, Lawmaker Says

US Senator Pat Toomey said accusers informed him that the FDIC was pressuring banks to stop providing services to crypto companies.

US Senator Pat Toomey (R-Pa.) May be relying on banks to prevent them from providing services to crypto companies, US Senator Pat Toomey (R-Pa.) Cho learned on Tuesday, citing communications he received.

In a letter to FDIC Acting Director Martin Gruenberg, Toomey wrote that he had heard from “affected parties” and whistleblower communications, which stated that the banking regulator Federal banks have attempted to “prevent banks from doing business with legitimate crypto-related companies,” even though providing services to these companies is not illegal. Toomey asked the regulator to confirm whether any FDIC officials have actually asked banks not to do business with crypto companies, and if so, explain why.

American Banker first reported the letter on Tuesday.

Toomey referred to “Operation Choke Point,” a previous initiative by the FDIC and the Department of Justice whose stated purpose was to pressure banks not to provide services to short-term lenders and short-term loans. financial fraud charges, but this also seems to put pressure on banks not to provide services to companies engaged in legitimate activity such as gun sellers.

According to whistle-blower communications we have authenticated, staff at FDIC’s headquarters in Washington, D.C. are urging FDIC regional offices to send letters to multiple banks asking them not to open. expanding relationships with crypto-related companies, without providing any legal basis for sending such letters,” Toomey wrote. “… As I understand it, in one or more such cases, a bank planned to grant a customer access to the company’s trading platform related to cryptocurrencies through a banking application. your bank’s online or mobile banking.”

FDIC officials also allegedly directed a regional branch to “downgrade” a bank’s loan classification to a cryptocurrency company, which Toomey called “very atypical.”

In a statement, the FDIC said, “The FDIC is acting consistently with established regulatory bodies to ensure that banks engaged in crypto-related activities are doing so safely. This may involve the FDIC asking an organization to delay the initiation or non-expansion of crypto-related activities until a supervisory response With the risks clearly visible in the crypto-asset market, these are the necessary and appropriate actions to take.”

The regulator released statements before directing banks to exercise caution when dealing with crypto companies.

“The information requested by the FDIC will vary on a case-by-case basis depending on the type of crypto-related activity. However, the initial notification to the FDIC’s Regional Director must describe the activity in detail and provide the organization’s proposed schedule for joining the letter said.

The letter is similar to one published by the Federal Reserve this week, which also directs banks under its supervision to contact the central bank before engaging in crypto activities.

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