The House Oversight Committee is investigating whether FDIC’s delayed crypto surveillance and banking restrictions are driven by political motivation or excessive illegal regulations.
The House Oversight Committee is investigating FDIC’s crypto policy
The House Oversight and the Government Reform Committee announced on February 28 that Chairman James Comer (R-KY) is investigating the Federal Deposit Insurance Corporation’s (FDIC) approach to cryptocurrency surveillance under the Biden administration. Comer’s investigation follows concerns raised by the acting chair of the FDIC.
The efforts of agencies to monitor cryptocurrency under the Biden administration have been full of delays and often discouraged banks from pursuing crypto-related efforts.
Reports show that certain companies and individuals, including First Lady Melania Trump, may have been unfairly denied banking services due to their relationship with cryptocurrency. Comer requested an unedited FDIC document to determine whether federal regulators pressured banks to distance themselves from the crypto sector.
Addressing the potential consequences of excessive regulatory control, Comer warned of the impact on both business and innovation. “The Commission is concerned that overreach by government regulators could arbitrarily curtail industries they deemed disadvantaged and impact business operations by preventing entities from accessing cash to fulfill their salaries and promoting technical and financial innovation overseas,” he stressed.
Lawmakers stressed that restrictive policies could force blockchain, distribute advances in ledger technology from the United States, and ultimately weaken the country’s competitiveness in financial innovation.
Comer’s research aims to provide greater transparency into the role of FDIC in shaping the financial industry’s approach to cryptocurrency. His research stems from the February 5 release of compiled records, including key responses between FDICs and financial institutions involved in digital assets. He emphasized:
64 of these documents include communications with 24 banks that received the “suspension letter,” and 111 documents consist of records of FDIC communications and other regulated agencies’ cryptographic activities.
By requesting full transparency, Comer attempts to clarify whether FDIC’s regulatory approach is driven by political motivation, or whether financial institutions have independently chosen to suspend crypto-related services. His letter to the FDIC also builds on the broader investigation into the potential desertion of legitimate companies and individuals engaged in digital asset activities.
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
