US Democratic senators want crypto guidance revoked
In an open letter dated August 10, three Democratic senators led by Senator Elizabeth Warren of Massachusetts asked the acting Comptroller of the Currency, Michael Hsu, to revoke guidance allowing national banks to engage in cryptocurrency activities.
“We are concerned that the OCC’s actions on crypto may have exposed the banking system to unnecessary risk and request that you withdraw existing interpretive letters that have permitted banks to engage in certain crypto-related activities,” the senators wrote.
Senator Warren, who is a member of the Senate Banking Committee, was supported by Senators Dick Durbin of Illinois, Bernie Sanders of Vermont and Sheldon Whitehouse of Rhode Island who have openly criticized the crypto industry
In their letter, the senators argue that the OCC has failed to address the challenges created by the crypto-related banking industry and to put in place mitigation measures to protect banks and their customers.
Senators ask OCC to engage Federal Reserve
The letter, which includes a series of questions about OCC-regulated banks’ crypto activities, also urges the comptroller to engage the Federal Reserve and the Federal Deposit Insurance Corp to develop a “comprehensive approach” that adequately protects consumers and the safety and soundness of the banking system.
The crypto guidance that has sparked outrage from senators includes mention of several letters asking how many banks were approved in the past year to the 45th president of the United States, Donald Trump. The Office of the Comptroller of the Currency was then headed by Brian Brooks, now the CEO of the crypto industry.
“Given the risks that cryptocurrencies pose to banks and their customers, we request that you withdraw OCC Interpretive Letters 1170, 1172, 1174 and 1179 and coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation to develop a comprehensive approach that adequately protects consumers and the safety and soundness of the banking system,” the senators said in a letter.
The letter comes hours after the Labor Department released the consumer index report that jolted the crypto markets and took pressure off the Federal Reserve, with Biden vowing to push for the passage of the Inflation Reduction Act that will stabilize the markets.
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