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FDIC Lets Banks Jump Into Crypto, No Permission Needed – What Could Go Wrong?

BBG News

In a move that can only be described as “bold” (or perhaps “reckless,” depending on your perspective), the U.S. Federal Deposit Insurance Corporation (FDIC) has given its member banks the all-clear to dive into the wild world of “crypto-related activities” without so much as a “may I?”

The federal banking regulator has decided to rescind a previous rule that forced banks to send a formal notification if they even thought about getting involved with digital assets. Yes, that’s right — they no longer have to ask for permission. I can practically hear the collective sigh of relief from the banking sector.

Now, the FDIC has made it clear: as long as the banks “adequately manage the associated risks,” they’re free to do as they please in the crypto space. Who knew managing “risks” could be so vague and subjective? Ah, the beauty of regulation in the modern age.

FDIC Acting Chairman Travis Hill, ever the optimist, has declared this change to be a “new page” in the FDIC’s approach. Apparently, the past three years were “flawed.” And here I thought they were just *perfect*.

“I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards,” said Hill, as if we all hadn’t already witnessed several “new approaches” in the last decade.

Meanwhile, crypto stakeholders (who I’m sure have a few things to say) have been accusing the FDIC of quietly facilitating “Operation Choke Point 2.0” — which, for those who are unfamiliar, is an alleged plot by the Biden Administration to crush the digital asset industry. Sounds a bit like a Bond villain plot, doesn’t it?

Coinbase, for example, has been using the Freedom of Information Act (FOIA) like a spy gadget, uncovering evidence that the FDIC had asked banks to freeze crypto services — and not just once, but multiple times. These “pause letters” were sent to a shocking 24 banks. The conspiracy thickens!

Last month, in a rare move of transparency (I know, shocking), the FDIC released some redacted documents on its crypto supervision activities. Among these documents? Those very “pause letters” — a beautiful reminder that even in the world of banking regulations, nothing is ever truly straightforward.

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2025-03-29 20:02

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