The federal regulators in the US have taken up a consistent approach to manage cryptocurrency activities in the banking industry. In regard to the claims about “debanking,” it turned out that banks were only asked not to pursue active crypto buying in 2022 and 2023 but were free to operate with shorting companies.
The Federal Deposit Insurance Corporation has posted several unnamed banks with supervisory “pause letters” after History Associates Incorporated, which is associated with Coinbase, submitted a lawsuit. This is one more piece of information that Coinbase has put in order to demonstrate its claim that there is an effort to sever crypto businesses from the conventional banking sphere.
Originally published in December, these letters received more prominence as a Judge directed the regulator to supply less redacted copies of these letters. There is a new set of 25 letters along with two new ones which the regulator has never released before and these letters bolster further the limited approach that regulators have taken.
FDIC’s Crypto Pause – Attempt to Mute the Progress
What these letters show is that while banks were therefore requested to stop providing any further advances in crypto activities, they were not totally banned from that market. The over-ambitious spirits of the staff at the FDIC were restrained by the position taken by their superiors to request banks.
A 2022 FDIC internal memo has recently come to light that states, alongside banking, crypto firms should also be bred under a more sensitive light being all its associated risks. This article further goes into more detail in regard to declaring assets in custody a high risk activity, writing it infers a major threat to safety and security.
As Bold As The Vision: Inquisition Towards Coinbase Spearheaded
Paul Grewal, the Chief Legal Officer for Coinbase announced in a statement that the documents displayed a ‘coordinated’ approach towards restricting a majority of the activities related to crypto. Further debunking these regulations. He stated that the crypto made these regulations in a bid to constrain the escalating growth of the industry. Deeming these initiatives unfair.
So, now that public reveales are being put under scrutiny we can expect a far more lenient approach from the incoming Trump administration regarding crypto and its associations. An executive order rescinding all constraints on the industry is set to be released by him on January 20.
Having to combat with scams and volatile crypto, regulators now have an added task of solving the puzzle regarding maintaining finance stability. Evidently, these papers are the key to understanding how these federal agencies work so as to keep other external factors in check.
