John Isige
United States’ most popular crypto lobbyist group Blockchain Association (BA) has launched a quest for information on the possible “de-banking” of cryptocurrency companies in the wake of the shattering failure of three crucial financial institutions in March; that is the Signature, Silicon Valley and Silvergate banks.
The Blockchain Association filed Freedom of Information Act (FOIA) requests with the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, seeking information related to the exclusion of crypto companies from banking services in the United States.
The Blockchain Association Investigating Possible De-banking Of Crypto Firms
The Blockchain Association through a statement sent by the group’s CEO Kristin Smith reckons that there could be more than what meets the eye in this situation. “We see smoke that indicates fire,” Smith wrote in the emailed statement sent to The Block.
1/ TODAY: we sent FOIA requests to the following govt agencies, seeking info on the potential de-banking of lawful crypto business:
FDIC
Board of Governors of the Federal Reserve System
and the OCChttps://t.co/GdjNT6sWdU pic.twitter.com/vB4He5oQfY— Blockchain Association (@BlockchainAssn) March 16, 2023
The investigation is centered around account closures and the possible refusal to open new accounts belonging to crypto firms, especially those keeping the law.
“We see smoke that indicates a fire – the FOIA requests are intended to uncover the truth behind the potential de-banking of crypto firms in the U.S., including learning more about possible account closures of law-abiding crypto businesses,” Smith said in the statement.
BA has also asked crypto firms that have been impacted to come forward and submit their claims in confidentiality. The Lobbyist group will continue to gather industry information to build a credible case.
20/ We're happy to hear from everyone, but we're particularly interested in those who:
– had a bank account closed
– tried to open a new account and were refused
– work at a bank and had contacts with regulatorsIf that's you, email us:
— Jake Chervinsky (@jchervinsky) March 16, 2023
In the statement published on the Blockchain Association website, the group insists “these are lawful businesses in the United States and should be treated like any other law-abiding business.” Crypto businesses and companies require bank accounts to facilitate their day-to-day operations, including paying employees, taxes, and vendors.
“The crypto industry is building the next generation of the internet and financial services. This is important work that has created tens of thousands of American jobs. Businesses need bank accounts to pay employees, vendors, and taxes,” The BA CEO Kristin added in the statement.
The Blockchain association describes itself as “the collective voice of the cryptocurrency industry.” Its members cut across the industry from leading firms, and investors to crypto projects, including Ripple, Kraken, eToro, Circle, Genesis, Ava Labs Phantom, and Crypto.com among others.
The Block reached out to the OCC spokesperson but the organization replied saying “it does not comment on correspondence.” Similarly, the FDIC passed on a request for comment on FOIA demands but referenced previous statements on crypto. Another request to the Federal Reserve went unanswered.
What We Know So Far
The banking crisis in the United State started when Silvergate Bank announced it was evaluating its capital position to survive and may not meet the deadline to file with the Securities and Exchange Commission (SEC).
On March 8, Silvergate’s parent firm, Silvergate Capital Corporation, said it was going to “voluntarily liquidate,” the crypto bank’s assets, citing recent regulatory developments in the US.
UPDATE: Employees at Silvergate $SI have been told to prepare for liquidation and shutdown imminently.
**Source: “we’ve been told that an orderly liquidation will be announced and our charter will be handed over to the FDIC.”
**employees have been given their WARN Act… https://t.co/2v15gcjMHQ
— Andrew (@AP_Abacus) March 8, 2023
Before the dust settled, On March 10, Silicon Valley Bank could not stay operational following a bank run on deposits. The US Treasury and the FDIC swooped in speedily to calm the situation and assure depositors they will be made whole.
SVB was put under a new unit and CEO ahead of the Fed and FDIC announcing the closure of Signature Bank on March 12. The joint statement by the regulators outlined that the decision to shut down Signature Bank was to “protect the U.S. economy by strengthening public confidence in our banking system.”
Still, the message was interpreted by some experts like Barney Frank, as a “strong anti-crypto message.” Frank is the former US Representative who also sits on the Signature Bank board.
An FDIC spokesperson while speaking to Cointelegraph revealed bidding had commenced for other banks with interest in buying Signature and SVB banks. The spokesperson also commented on circulating reports requiring interested banks not to support crypto-related services may have come out as the regulator’s “confidential marketing process.”
Meanwhile, the New York Department of Financial Services (NYDFS) has vehemently rejected the allegations that its decision to take over Signature Bank was an anti-crypto campaign.
Claims of bank accounts belonging to crypto firms with no prior notice or explanation have been rising, according to the chief policy officer at the Blockchain Association, Jake Chervinsky.
“This disturbing trend suggests that regulators are trying to cut crypto entirely out of the banking system,” Chervinsky said in a tweet but also accused government agencies of disregarding the law. “If regulators are de-banking crypto companies, they’re breaking the law.”
Regulatory Pressure Could Continue
Following the implosion of Sam Bankman-Fried’s FTX exchange, regulators have been voicing their concerns about the state of the crypto industry. The Fed in January cited volatility banks with crypto exposure are likely to face in one of its statements.
In another reminder, signed on by the Federal Reserve, OCC, and FDIC in February, the regulators referred to possible liquidity risks in banking institutions and even instructed them to “apply existing risk management principles.”
“Banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, as permitted by law or regulation,” the regulators said in the February statement.
Another tweet by Chervinsky questioned the commitment to the above statement amid the latest pushback from the regulators.
Related Articles:
- First And Only Vote to Earn Meme Coin Raises $770k in 6 Days – 2 Days Left to Get Cheapest Presale Price
- NFTs Will Still Redistribute Power in the Digital Art World Despite the Sell Off
- Banking Crisis – TrueUSD Stablecoin Shifts $1 billion to the Bahamas, Who Else Will Leave US?
Love Hate Inu - Next Big Meme Coin
- First Web3 Vote to Earn Platform
- Vote on Current Topics and Earn $LHINU Tokens
- Secure, Reliable and Anonymous Voting
- Rug Pull Proof - 90% of Tokens Available in Presale
- Accumulate Voting Power by Staking $LHINU Tokens
This article was written for Business 2 Community by John Isige.
Learn how to publish your content on B2C
Join our Telegram channel to stay up to date on breaking news coverage
Add B2C to your Google News Feed
Discuss This Article
Add a New Comment /Reply
Thanks for adding to the conversation!
Our comments are moderated. Your comment may not appear immediately.