Regulators Threaten Crypto’s Future: Short-Sightedness in Action

• The nation’s federal and state regulators are cutting crypto off from U.S. banks, hindering American innovation and inflicting long-term damage on the U.S economy.
• In January, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) issued a joint statement discouraging banks from accepting deposits from crypto companies without public input.
• Former Congressman Barney Frank has expressed concern about this lack of public input in the regulatory process.

The Short-Sightedness of Run-Amok Regulators

Ric Edelman, founder of the Digital Assets Council of Financial Professionals, talks about a key reason why crypto’s future looks bleaker: an apparent effort to cut it off from U.S. banks.

Regulators Trying to Kill Crypto?

Are regulators trying to kill crypto by forbidding banks from doing business with crypto companies? And if they are, what is their reasoning behind this move?

Banks Being Discouraged From Doing Business With Crypto Companies

In January, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) issued a joint statement discouraging banks from accepting deposits from crypto companies – taking action without the legally required public input. When banks continued to do business with crypto companies, the regulators made their point by shutting down Silvergate Bank, Signature Bank and Silicon Valley Bank (SVB). And in case that wasn’t clear enough, when FDIC turned over Signature Bank’s $38.4 billion of deposits to Flagstar Bank, Signature’s $4 billion of deposits held in their digital assets businesses were excluded.

Questioning Regulatory Intentions

Businesses involved with digital assets are engaged in legal activities so why would FDIC prohibit Flagstar Bank from accepting payroll accounts belonging to such companies? Former Congressman Barney Frank has expressed his concern about this lack of public input in regulating these types of activities as it may be limiting investors’ options while also having potential negative impact on American innovation and US economy overall.

Conclusion

All in all these recent moves by federal and state regulators should be closely monitored as they might have far reaching consequences for cryptocurrency industry as well as other financial service providers who work with them or offer similar services/products that could be affected by these decisions in one way or another .