Warren wants the Office of The Comptroller of Currency (OCC), the Fed, and FDIC to collaborate and develop an alternative approach for the crypto industry to protect investors.
Recent events have prompted US crypto critics to call for more regulatory oversight of the crypto industry.
One of the top crypto antagonists in the US, Senator Elizabeth Warren, hasn’t backed down from her anti-crypto stance. In her latest effort, she is attempting to cut ties between crypto and wall street. As a member of the Senate banking committee, Warren wrote a letter to her committee members and urged them and other Senators to sign it.
The letter, which calls for the withdrawal of crypto services provided by banks, will be forwarded to the Office of the Comptroller of the Currency (OCC). The OCC guidance allows banks to offer crypto custody and other crypto services to crypto firms. This guidance is what Senator Warren is hoping to remove.
Warren believes that wall street’s collaboration with the crypto market through this guidance is a huge risk for the banking system. The letter suggests that the OCC establishes a new approach for the crypto market to protect its investors and do so in partnership with the US Federal Reserve and the Federal Deposit Insurance Corp (FDIC).
The Senate banking committee will send the letter’s final version to Micheal Hsu (the OCC Acting Comptroller). An OCC rep who preferred to be anonymous said Hsu might give in to Warren’s suggestions in the letter. He explained that Hsu recently expressed his worries about the rising interest in banks’ collaboration with crypto.
In recent interviews, Hsu has been urging players in the traditional finance system to be more cautious in partnering with crypto firms, especially as the crypto contagion lingers. Many investors have lost billions in fiat currency to the current crypto winter. Hence, it is no wonder regulators and lawmakers are pushing for greater scrutiny of activities in the crypto space.
According to the letter, the OCC’s current guidance and policies aren’t adequate to protect financial institutions against the current crypto market downturn. Hence, it suggests that removing or modifying the crypto guidance for banks will be the best option for banks not to have too much risk exposure to the crypto market.
“We are worried about the OCC’s failure to address the previous interpretive letters’ main points properly. These letters highlight banks’ risk exposures to crypto operations, which has surged greatly in the last few months.” The letter also requests that the OCC provide details of the regulated financial institutions actively providing crypto-related services, including the total dollar volume of their transactions.
More scrutiny for crypto
Gary Gensler (SEC chief) and Senate bank committee members (Sharrod Brown and Elizabeth Warren) have continually called for more regulatory supervision of the activities of crypto firms and the crypto space. They have even become more vocal about their stance in light of the current crypto winter.
However, crypto participants have often criticized the trio for attempting to stifle the crypto space through their actions and words. There is even a petition by top crypto participants calling for the resignation of SEC chair Gary Gensler.
Brown and Warren are pushing the SEC and other regulators to find the means to eliminate crypto risks and frauds. Recently Senator Warren wrote a letter to regulators suggesting that they impose punishments against crypto miners that consume high energy.
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