Feds ‘weaponize’ banking crisis to kill crypto: Rep. Tom Emmer
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A Republican congressman and a former banking regulator with deep ties to the crypto industry have accused federal agencies of using the current banking crisis to “stifle digital assets.”
Minnesota Rep. Tom Emmer, the No. 3 Republican, sent a letter to the chairman of the Federal Deposit Insurance Corporation on March 15 — accusing the agency and another bank regulator, the Office of the Comptroller of the Currency, of “effectively weaponizing the authorities over the past few months to purge legitimate digital assets and capabilities from the United States.”
It comes in the wake of the voluntary shutdown of crypto-focused Silvergate Bank last week and the subsequent seizure and shutdown of two other banks with heavy crypto involvement that were exposed to run: Silicon Valley Bank and Signature Bank.
Emmer cited comments from Signature Bank board member and former congressman Barney Frank that his institution was abruptly closed Sunday night to “send a message” to banks to refuse to do business with the cryptocurrency industry. Frank co-authored the Dodd-Frank Act, which tightened supervision of banks after the 2008 subprime mortgage crisis.
Federal bank regulators and those in New York and California — who actually ordered the closure of SVB and Signature before turning them over to the FDIC for liquidation — have strongly denied this. And whether it succeeds in driving banks away remains to be seen.
Arguing that the Biden administration is pushing “US crypto firms, and their US clients, into offshore, unregulated, opaque and insecure markets,” said Rep. Emmer:
He asked FDIC Chairman Martin Gruenberg if his agency has “directed banks under its supervision not to provide banking services to crypto firms?” Rep. Emmer also asked:
Rep. Emmer’s opinion was shared by Brian Brooks, who was acting Comptroller of the Currency under President Donald Trump.
Brooks, who stepped down as head of US crypto exchange Coinbase to take over the OCC, told CoinDesk on Wednesday that “it’s pretty clear that there has been a decision across the banking regulatory agencies … that crypto itself is risky and needs to be released from the banking system.” He added:
During his own time at the OCC, Brooks said he, the head of the FCC and the deputy chairman of the Federal Reserve — which oversees banking supervision — had a weekly call to discuss their priorities for the week and how they could support each other.
Brooks, who now sits on the board of blockchain software and mining hardware maker BitFury, said that in this case he is “100% confident that regulators worked together.”
During his own time at the OCC, Brooks pushed hard to get banks to support crypto, even proposing a rule change requiring banks to “provide access to services, capital and credit based on the risk assessment of individual customers, rather than broad-based decisions that affect entire categories or classes of customers.”
Although crypto was not explicitly mentioned, it was clear what industry Brooks was talking about.
