Two major crypto-friendly banks announced their shutdown last week, Silvergate Bank and Signature Bank. In the case of Signature Bank, the FDIC officials alongside the Fed took the decision to shut down stating that it would help prevent the contagion from spreading.
On Wednesday, March 15, Congressman Tom Emmer wrote a letter to the FDIC chairman Gruenberg seeking answers to questions over the reports that the regulatory is weaponizing the current instability in the US banking system in order to choke legal crypto activity in the United States.
There have been multiple questions raised over the last week over the singling out of financial institutions by regulators. Some also believe that this is a message from regulators asking people to stay away from crypto.
Congressman Tom Emmer cites the timeline of measures initiated by the Fed, the FDIC, and other regulators discouraging banks from holding crypto assets. He added that on January 27, 2023, the White House National Economic Council published “The Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks”.
In his letter, Tom Emmer writes that this report summarizes Biden’s political plan to “flawlessly abuse” the administrative state and push American crypto firms and their firms into offshore, unregulated, opaque, and unsafe markets
Emmer said that The Administration’s lazy and destructive regulatory strategy seeks to choke out crypto from the US financial system. He added that this strategy could have a disastrous effect as most crypto exchanges operating offshore serve American customers without much transparency, as in the case of FTX.