Progressive senators tell banking regulator to cancel Brian Brooks-era crypto guidance

Quick Take

  • Four senators wrote to a key banking regulator today, calling on tighter restrictions on banks interacting with crypto. 
  • The letter looks to rescind guidance that had come out under the last year of the Trump administration. But it is guidance that Biden’s officials have maintained. 

A group of Democratic senators is trying to disengage banks from crypto activities. 

In an August 10 letter, Senators Elizabeth Warren (Mass.), Dick Durbin (Ill.), Sheldon Whitehouse (R.I.) and Bernie Sanders (Vt.) asked Acting Comptroller of the Currency Michael Hsu to cancel a series of interpretive guidance that the new administration has held over from the previous leadership.

The Office of the Comptroller of the Currency (OCC) regulates national banks. In his last year in office, President Donald Trump appointed Brian Brooks to lead the OCC. Brooks had previously served as lead council for Coinbase and would go on to be CEO of Binance.US and then Bitfury. Under Brooks, the OCC issued a series of interpretations that the Senators today wrote "essentially granted banks unfettered opportunity to engage in certain crypto activities and remain problematic.

The four authors are some of the most vocal progressives in the Senate. The lack of centrist or bipartisan presence suggests limited interest in undoing Brooks' policies. So does the OCC's standing willingness to continue them, even as it did call into question crypto bank Anchorage's conditional charter in April.

Hsu has, in the past, urged caution around cryptocurrency regulation, noting the resilience of the banking system even amid crypto market turmoil. Today's letter argued that, despite limited contagion up to this point, "it is clear that stronger protections are necessary to mitigate crypto’s risks to the financial system and consumers."

The Senate Banking Committee, on which Warren holds a seat, came to loggerheads earlier this year over President Joe Biden's nomination of Saule Omarova to head the OCC. Omarova ultimately withdrew her nomination. Hsu retained his job. 

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