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Senator asks FDIC about allegations discouraging banking relationships with crypto companies

Published on

December 18, 2022
Read Time:1 Minute, 36 Second

Pennsylvania Sen. Pat Toomey, senior member of the US Senate Banking Committee, has despatched Martin Gruenberg, director and performing chairman of the Federal Deposit Insurance coverage Company (FDIC), a letter informing him of allegations made by a whistleblower associated to FDIC actions. The senator suspects that the FDIC "might take inappropriate motion to stop banks from doing enterprise with legit cryptocurrency-related (crypto-related) corporations."

Toomey wrote that there's affirmation of whistleblower claims that “personnel at FDIC headquarters in Washington, DC are requesting FDIC regional workplaces to ship letters to a number of banks asking them to desist from ties with crypto-related companies with out to supply a authorized foundation for the sending of such letters.”

Moreover, Toomey wrote that there have been stories that workers at FDIC headquarters took the extremely atypical step of contacting workers at a regional workplace to induce them to downgrade the standing of a mortgage to a crypto-related firm, including:

“Workers at FDIC regional workplaces reportedly interpreted FDIC headquarters' involvement on this matter as an try to vary the final classification of loans to crypto-related companies and discourage banks from making such loans sooner or later.”

Judging by Toomey's letter, the alleged FDIC letters have been despatched on or about June sixth. Toomey has requested Gruenberg to verify or deny the alleged actions by the tip of the month, along with asking whether or not the FDIC Authorized Division has issued an opinion on the alleged actions.

Associated: Deposits with non-banks, together with crypto companies, aren't insured – FDIC

Toomey is a hawkish crypto advocate. He was a vocal critic of the Securities and Change Fee's insurance policies. He's additionally an writer of the Stablecoin TRUST Act of 2022 and launched the companion laws to the Senate for the Digital Foreign money Tax Equity Act of 2022. He has additionally expressed reservations concerning the US Federal Reserve issuing a digital forex.

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Azeez Mustafa
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author.
Last Updated : December 18, 2022
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