• The Blockchain Association has sent Freedom of Information Act (FOIA) requests to the Federal Reserve (the Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) to seek information about crypto companies suddenly losing their bank accounts.
• This comes after reports of traditional financial institutions debanking cryptocurrency firms, such as Silvergate, Silicon Valley Bank, and Signature Bank.
• The Blockchain Association believes that this is an effort by regulators to shut out cryptocurrency companies from the banking system.
Crypto Companies Suddenly Losing Bank Accounts
Reports have been increasing that cryptocurrency companies are having their bank accounts closed without notice or explanation, leading to concern in the industry. This follows on from some high-profile shutdowns such as Silvergate, Silicon Valley Bank and Signature Bank.
The Action by The Blockchain Association
The Blockchain Association, a US-based non-profit trade association for blockchain and cryptocurrency industry has now taken action by sending Freedom of Information Act (FOIA) requests to the Federal Reserve (the Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). They are seeking information regarding these sudden closures.
Regulators Take Hostile Actions Against Crypto Industry
The move by The Blockchain Association follows several recent hostile actions from regulators against crypto firms including a joint statement warning of „key risks associated with crypto-assets“ issued on 3 January, followed by a statement from the Fed on 27 January that banks cannot conduct „crypto-asset related activities“. This was then formalized in a final rule published on 7 February despite not following valid rulemaking process. At this time Custodia Banks membership application was denied citing “concerns regarding heightened risks” associated with cryptocurrencies.
Blockchain Associations Request for Information
The request from The Blockchain Association seeks more clarity around why these decisions have been taken and what exactly they mean for crypto businesses moving forward. As well as making this request they are also collecting evidence and stories surrounding these issues so they can be better understood and addressed in future policy making discussions.
Conclusion
The closure of bank accounts held by cryptocurrency companies is concerning given its implications for those involved in this space. The action taken by The Blockchian Assocation is an important step forward in attempting to get answers about why these decisions have been made and what it means for crypto businesses going forward.