Federal Reserve Eases Scrutiny on Crypto Firms
The US Federal Reserve has updated its banking oversight policies, removing ‘reputational risk’ as a consideration. This change benefits the crypto industry, which argued the policy unfairly targeted digital asset firms.
Operation Chokepoint 2.0: Background and Impact
Following the 2023 collapse of crypto-friendly banks, Operation Chokepoint 2.0 led to banking denials for over 30 tech and crypto companies. The Fed’s policy shift now emphasizes financial risk over reputational concerns.
Implications for Financial Institutions
Banks must still maintain robust risk management programs. The Federal Reserve will train examiners to apply the new standards consistently across supervised institutions.
Industry Response to Regulatory Changes
Senator Cynthia Lummis called previous policies damaging to crypto businesses, while Rob Nichols of the American Bankers Association praised the increased transparency in supervision.
Regulatory Trends in Crypto Banking
Other agencies including the Office of the Comptroller of the Currency and FDIC have similarly relaxed crypto-related restrictions, indicating broader regulatory evolution.
