FDIC to Discuss Proposed Rules Amid Allegations of Crypto Debanking
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) is set to discuss proposed rules that could impact crypto companies, following allegations of debanking. The FDIC announced on Thursday that its board of directors would consider a proposal regarding the prohibition of reputational risk by supervisory authorities. Although the agenda did not explicitly mention concerns associated with digital assets, the move is seen as a response to criticism from the crypto industry.
The issue of debanking has been a contentious one, with many in the crypto industry claiming that they have been denied access to US banking services due to their connections to digital assets. US President Donald Trump has also weighed in on the issue, using the term “reputational risk” in an August executive order to claim that access to banking services could lead to “politicized or illegal debanking.” While the order did not explicitly mention digital assets, it has been seen as a nod to the concerns of the crypto industry.
Background on the Debanking Issue
Court documents published in December as part of a Freedom of Information Act request with the FDIC showed that the agency had asked some institutions to pause all activities related to crypto assets in 2022. The alleged measures, dubbed “Operation Chokepoint 2.0” by some, became a campaign issue for Trump and many Republicans during the 2024 election. After Trump won the presidential election, FDIC Chairman Travis Hill said that the agency would re-examine its supervisory approach to crypto-related activities.
The ongoing debate over debanking has significant implications for the crypto industry, which has long struggled with access to traditional banking services. The FDIC’s proposed rules could provide clarity on the issue, but it remains to be seen how they will be received by the industry. As the US government shutdown continues, the FDIC has said that it will remain “open and operational,” despite the reduced activities of other financial regulatory agencies.
Impact of the US Government Shutdown
The US government shutdown, which began on Tuesday at midnight, has significantly reduced business activities among US financial supervisory authorities, such as the Securities and Exchange Commission and Commodity Futures Trading Commission. However, the FDIC has said that it will continue to operate, regardless of the duration of the shutdown. The agency’s decision to discuss the proposed rules on reputational risk is seen as a sign that it is committed to addressing the concerns of the crypto industry, even in the face of ongoing political uncertainty.
For more information on the FDIC’s proposed rules and the ongoing debate over debanking, please visit https://cointelegraph.com/news/fdic-vote-reputational-risk-crypto?utm_source=rss_feed&utm_medium=rss_tag_regulation&utm_campaign=rss_partner_inbound
