Senator claims the FDIC is stonewalling banks that try to work with crypto

Quick Take

  • According to whistleblowers reporting to Senator Pat Toomey’s office, the FDIC is stymying banks in their efforts to expand crypto work.
  • The FDIC provides federal deposit insurance and is a crucial link in the US’s chain of banking regulators. 

Senator Pat Toomey, R. PA, is calling the Federal Deposit Insurance Corporation to account for its work in crypto. 

In an August 17 letter to FDIC acting chairman Martin Gruenberg, Toomey says the agency "may be
improperly taking action to deter banks from doing business with lawful cryptocurrency-related
(crypto-related) companies."

Citing whistleblower communications to Toomey's office, the letter says the FDIC has asked member banks to "refrain from expanding relationships with crypto-related companies" and avoid extending credit to crypto clients. 

The letter asks Gruenberg to account for these actions and to turn over documentation as to the FDIC's work on crypto. 

Earlier this week, the Federal Reserve finalized guidelines that would seemingly make it easier for FDIC-insured banks with novel charters, including fintech companies, to access master accounts with the Fed. 

Toomey is the leading Republican on the Senate Banking Committee. Since announcing that he will not seek another term, he has emerged as a major crypto advocate. This is not his first action interrogating an agency for its work on cryptocurrency. 

This is, however, Toomey's final few months in office. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.