In a major development, US regulators are under scrutiny for their potential actions to de-bank the cryptocurrency market. Republicans on the House Financial Services Committee have called out SEC Chair Gary Gensler for his enforcement strategy and regulatory agenda. This has led to a wider investigation into coordinated efforts to restrict banking services for digital asset firms, with lawmakers arguing that digital asset activity is not inherently risky and should not result in de-banking.
US House Probes Potential Crypto De-Banking
The Chairman of the US House Financial Services Committee, Patrick McHenry, along with Subcommittee Chairmen French Hill and Bill Huizenga, have written letters to Jerome Powell, Martin Gruenberg, and Michael Hsu. The letters seek all records of the agencies in relation to digital assets, financial technology, and inclusion.
Following backlash from the crypto community and House Majority Whip Tom Emmer, the US House lawmakers McHenry, Hill, and Huizenga have written letters to the FDIC, Treasury Department, Federal Reserve, and Office of the Comptroller of Currency to inquire about their actions and plans for the digital assets market amidst concerns of a potential Operation Choke Point 2.0.
Actions Of SEC In Contrast To the Biden Administration
The US lawmakers have criticized the agency’s actions, citing the contradiction with the Biden Administration’s “Executive Order on Ensuring Responsible Development of Digital Assets.” The committee will justify the anti-crypto approach at the expense of endangering consumers and investors.
In January, the Fed, FDIC, and OCC jointly cautioned about crypto-related risks in the banking sector. According to the letters, while the digital asset market is volatile, the FTX debacle and banking crisis was not a result of the crypto activity. The lawmakers argue that digital asset activity is not inherently risky.
“The reaction by the federal prudential regulators to fraud and mismanagement should not lead to de-risking of the digital asset industry. Taken together, the actions of the Fed, FDIC, and OCC do not appear to be in reaction to recent events.”
What will be the potential impact of the US House investigation into Operation Choke Point 2.0 and the potential de-banking of the cryptocurrency market? Stay updated on the latest developments.
Source: https://coinpedia.org/news/us-house-investigates-operation-choke-point-2-0-over-fears-of-crypto-de-banking/