InfoBytes Blog
Toomey pressures FDIC to respond to alleged anti-crypto actions
On August 16, Senator Pat Toomey (R-PA) informed FDIC acting Chairman Martin Gruenberg that information provided by whistleblower communications suggest that the agency may be asking banks to “refrain from expanding relationships with crypto-related companies, without providing any legal basis.” Toomey’s letter expressed concerns about the ramifications of banks restricting services to legal crypto-related companies, stressing that “[g]iven the FDIC’s involvement under [Gruenberg’s] leadership in the Obama administration’s notorious Operation Choke Point, which sought to coerce banks into denying services to legal yet politically disfavored businesses, it is important to better understand the actions the FDIC is now taking and the legal basis for them.” He commented that regional offices allegedly received draft letters to send to banks requesting that they refrain from expanding relationships with crypto-related companies, and cited an example of a bank that planned to provide customers access to a crypto-related trading platform through the bank’s mobile app. “This arrangement appears similar to the common practice of banks partnering with third-parties so customers can access services like stock-trading platforms,” Toomey said, adding that the bank was going to send customers clear disclosures warning them that neither the trading platform nor their digital assets were insured by the FDIC. He cited another alleged incident where FDIC-headquartered employees purportedly urged regional examination staff to downgrade their classification of a specific loan that a bank made to a crypto-related company. “It is my understanding that it is highly atypical for FDIC headquarters personnel to be involved in reviewing an individual loan,” Toomey said. “FDIC regional office staff reportedly interpreted the involvement of FDIC headquarters in this matter as an effort to change how loans to crypto-related companies are generally classified and to deter banks from extending such loans in the future.” Claiming that the agency “may be abusing its supervisory powers to deter banks from extending credit to crypto-related companies,” Toomey asked the FDIC to respond to several questions pertaining to its alleged behavior by August 30.