Crypto’s Big Comeback? FDIC Makes a U-Turn

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  • The esteemed FDIC, guardians of our financial well-being, have been known to send out rather stern letters to banks, urging them to distance themselves from those pesky crypto firms. 🥱
  • But hold on to your hats, dear reader, for the current acting FDIC chair, Mr. Travis Hill, has decided to embrace a new approach. 😮 It seems the winds of change are blowing through the halls of regulation. 🌬️

This sudden shift in attitude comes amid the ongoing U.S. Senate hearings on the alleged de-banking of crypto firms – a situation that has caused quite a stir, as you might imagine. 😟

In a surprising turn of events, Mr. Hill has released a trove of 175 supervisory documents sent by the FDIC to crypto firms. These documents shed light on the infamous “Operation Chokepoint 2.0,” a campaign aimed at restricting banking access for crypto companies. 🔐

But fear not, for Mr. Hill has declared that a more nuanced approach will be taken from this point forward. 😌

“We are, shall we say, reconsidering our approach to crypto-related activities. This includes, with a touch of regret, retiring Financial Institution Letter (FIL) 16-2022. We are also paving a new path for institutions to engage in crypto- and blockchain-related activities while still adhering to, well, the usual safety and soundness principles. 👮‍♂️

This infamous FIL 16-2022, issued in the spring of 2022, was designed to manage risks related to third-party banking relationships, especially those pesky payment processors and fintech firms, including, of course, crypto. 🙄

Crypto’s De-banking Victims Speak Out

While the media has been abuzz with the de-banking saga, the issue truly gained traction after renowned venture capitalist Marc Andreessen brought it to the attention of the masses, you know, during the Joe Reagan Experience podcast. 🤔

This sparked the interest of policymakers, and with the new administration in place, things began to move at a pace that would make even a hummingbird blush. 💨 On the 5th of February, the U.S. Senate Committee on Banking held its first meeting with the de-banked victims – those brave souls who had been cast out of the traditional banking system. 😔

Nathan McCauley, founder and CEO of Anchorage Digital, a company that provides institutional crypto platforms, was among those who shared their experiences. 😔

Mr. McCauley noted that his company and other crypto ventures he invested in had faced significant challenges in maintaining bank accounts. 😢

“I have a sneaking suspicion that regulators put pressure on banks to cut off services to the crypto industry. Why do I think this? Two things: a series of anti-crypto regulatory actions between 2021 and 2023, and my own, personal, harrowing experience. 🕵️‍♂️

Paul Grewal, the legal chief of Coinbase, was surprised, perhaps even shocked, to learn that the FDIC’s de-banking push against crypto firms was linked to, gasp, Bitcoin‘s volatility and compliance risks, and not, as previously asserted, a “systematic risk” to the overall U.S. banking system. 😮

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2025-02-06 16:11