Last week, news about the closure of two top crypto-friendly banks, ie. Silvergate Bank and Signature Bank spread like bushfire leaving Crypto enthusiasts abandoned and helpless. The FDIC officers and the Fed claim to have decided to close Signature Bank to help stop the infection from diffusing.
Tom Emmer, who is a Congressman, wrote a letter on Wednesday, March 15, to Gruenberg, the FDIC chair, in search of replies to inquiries over the reports that the supervisory body is strengthening the current insecurity in the US banking system to clog legitimate crypto activities in the United States.
So many questions have arisen concerning the behavior depicted by regulators in picking out financial institutions. Some say this is an indirect communication from regulators requesting people to avoid cryptocurrencies.
Emmer Accuses Biden Administration of Hampering Innovation with Crypto Policies
According to Congressman Tom Emmer, the FDIC, Fed, and other supervisory bodies use unrealistic timelines to discourage banks from holding digital currency. He further claims that the White House National Economic Council, on January 27, 2023, devised a plan containing recommendations, regulations, and guidelines to mitigate the risks associated with cryptos.
Tom Emmer’s letter articulates his belief that the report is a political tool by the Biden government to hurt American Crypto businesses so that they can move to unregulated and unsafe markets out of the United States. Emmer believes that the government plan sketched in the report will result in unintentional penalties leading to undesirable effects for the US crypto market.
Fundamentally, he proposes that the report is an endeavor to abuse the administrative state to create problems for American crypto companies, which could make them seek protection in foreign countries and opaque markets without security.
Emmer alleged that the administration’s sluggish and unhelpful governing plan aims at suffocating crypto in the US fiscal structure. He further said that this approach could have a catastrophic effect as crypto markets overseas do not exhibit the transparency demonstrated by companies like FXT. The Congressman has posed some moving questions to the controllers.
Has the FDIC communicated clearly to banks that their management will involve heavy obligations if they take new crypto customers? Have they commanded banks under their control not to offer crypto entities with investment services?
There have been claims that the banks’ shutdown was because of investing in risky and unpredictable assets. However, statistics indicate that the banks were hurt more by interest rate hikes. Has FDIC advised banks on how to protect themselves from interest rate hikes?
Well-known as the “Crypto King of Congress,” Congressman Emeer has always talked about his strong support for the crypto market. He believes in cushioning crypto firms by creating a safe playfield for investors.