The crypto industry in the US has expressed its frustration at the country’s financial watchdogs, as they claim that regulators are making it “unfeasible or impossible” for crypto-related companies to operate in the country. This has led to a “universal conviction” among the industry that US financial watchdogs are unwilling to let crypto flourish, according to the Intelligencer. The report states that regulators are using both written and unwritten policies and rules that make it difficult for crypto firms to operate.
OCC rejects Protego Trust’s application for a national trust charter
The Office of the Comptroller of the Currency (OCC) has recently rejected the application of Protego Trust, a company that wanted to offer crypto custody services to institutional clients and did not intend to engage with retail investors. Protego had already received conditional approval in 2021, which helped it to raise $80 million and gain a valuation of $2 billion. However, the OCC rejected Protego’s application for a national trust charter on a previously unmentioned “technicality” after it completed requirements for full approval in February. The company’s founder, Greg Gilman, said that “in the end, it feels like there was an unannounced and unexplained policy change that derailed our efforts.”
Regulators’ negative attitude towards crypto points to a resurgence of Operation Chokepoint
The crypto industry claims that regulators’ negative attitude towards crypto points to a resurgence of Operation Chokepoint, which was an Obama-era policy to stifle certain politically unfavored industries like gambling, tobacco, and porn. The practice continued until Congress stepped in and created a rule to ensure it did not happen. However, the Biden administration abolished the rule after taking office, leading to concerns that regulators are once again trying to “de-bank” unfavored industries, with crypto being the latest target.
Congress members call for release of communication with crypto companies
Some Congress members have recently sent prudential regulators a letter highlighting their concerns and instructing them to release all communication with crypto companies to probe whether the unfair practice is occurring once again. Meanwhile, Congress recently held hearings where industry experts and participants testified about the myriad hurdles and frustrations with the regulatory process. However, lawmakers have yet to take any action on the matter. This sentiment is also echoed by observers in political and law circles, according to the Intelligencer report. A former regulatory official told the newspaper under the condition of anonymity that “it’s different from the original Choke Point, in that they are being pretty public about it – nobody’s guessing their views. Another difference is that it’s actually broader in scope.”