The Federal Reserve’s recent attempt to de-bank crypto companies has become a hot topic in the financial world. This move not only deprives the public of the opportunity to engage in the crypto industry but also raises questions about the legality of the Fed’s actions. Since the final rule was issued on Feb. 7, three banks central to the crypto industry have collapsed or been shut down: Silvergate, Silicon Valley Bank, and Signature. This article will examine the legality of the Fed’s actions and the impact they have had on the crypto industry.
The Fed’s recent move to de-bank crypto companies is illegal because they did not follow the required notice and comment procedures. According to the Administrative Procedure Act, federal agencies must allow the public to provide feedback and additional information before mandating compliance with new rules. However, the Fed issued a final rule without going through this process, which violates the law. This move not only deprives the public of their right to engage in the crypto industry but also sets a dangerous precedent for future regulations.
The recent collapse of three banks central to the crypto industry, namely Silvergate, Silicon Valley Bank, and Signature, is no coincidence. The Fed’s actions have forced these banks to close their doors, depriving the crypto industry of crucial banking services. Moreover, the FDIC’s exclusion of Signature’s digital-assets business from the deposits taken over by the assuming institution is a clear indication of the Fed’s intentions to de-bank the crypto industry.
The Fed’s move from an unstated policy to a stated policy and finally to a rule published in the Federal Register indicates a deliberate strategy to issue substantive rules while avoiding the notice and comment process. This strategy not only violates the law but also undermines the democratic process by depriving the public of their right to engage in the regulatory process. The Fed’s recent actions highlight the need for greater transparency and accountability in the regulatory process.
The impact of the Fed’s actions on the crypto industry has been significant. The de-banking of crypto companies has deprived them of crucial banking services, making it difficult for them to operate. This move has also sent shockwaves through the industry, causing investors to lose confidence in the stability of the crypto market. The collapse of Silvergate, Silicon Valley Bank, and Signature has sent a strong message to other banks and financial institutions, warning them of the risks of engaging with the crypto industry.
In conclusion, the Fed’s recent attempt to de-bank crypto companies is illegal and undermines the democratic process. This move not only deprives the public of their rightful opportunity to engage in the crypto industry but also sets a dangerous precedent for future regulations. The collapse of Silvergate, Silicon Valley Bank, and Signature is a clear indication of the impact of the Fed’s actions on the crypto industry. It is time for greater transparency and accountability in the regulatory process to ensure that the public’s interests are protected.
