Clandestine Financial War: US Bank Regulators Target Crypto Businesses
An interesting White Paper released by the law firm Richards Kibbe & Orbe LLP has claimed that the US Bank regulatory system is waging a “Clandestine Financial War” against crypto businesses.
What’s Going On?
According to the paper, the US Bank Regulatory agencies like the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC)is setting up roadblocks against crypto businesses who are trying to avail of traditional banking services. This “Clandestine Financial War” involves the agencies taking over two or three years to decide if banks are authorized to provide crypto custodial services and then adding extra conditions to satisfy the agencies.
As one can imagine, this would seriously hamper crypto businesses from expanding and from getting even simple bank services. Banks are worried they may lose their Federal Deposit Insurance protection if they work with the crypto companies. On the other hand, crypto businesses are forced to deal with higher costs, showing a lack of support for a growing industry.
The paper has caught wide attention, with reactions being passionate on both sides. Proponents of the crypto industry have drawn attention to the promises of digital currencies as a desirable alternative to traditional banking, and have called for US regulators to catch up with the rest of the world.
On the other hand, traditional banking agencies claim that the US regulators are just doing their job by requiring crypto companies to provide full disclosure of their financial management. Both sides must agree that there is still plenty of work to be done to ensure fair regulations for all kinds of banking services.
What Can We Do?
These delays and stringent rules can wreak havoc on crypto businesses and cause them to lose customers. To make sure everyone is treated fairly, we must focus on two things:
- Education – Both the crypto and banking industry can benefit from an increased dialogue and education on this issue. This can help regulators and banks understand the benefits of working with cryptocurrency businesses.
- Advocate – In the age of social media, there are plenty of tools we can use to spread the word and create more awareness on this issue.
Overall, there is still a long way to go before the US banking industry and crypto companies come to an agreed level of regulations. In the meantime, we have an opportunity to be proactive in creating a fair and balanced solution for all!
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