The recent session of the Senate Banking Committee in the United States witnessed the country’s regulators extensively talk about crypto.
Bob Menendez, the New Jersey senator in the session, took a jab at the financial regulators and said that they need to be more sincere in their approach towards crypto exchanges and other relevant lending platforms citing risk factors involved in it.
In response to the senator’s accusations, Martin Gruenberg, the acting chairperson of the Federal Deposit Insurance Corporation (FDIC) affirmed that the organization does not support any crypto firms in the nation and nor does its insurance schemes cover losses from any of the tokens. The insurance schemes of FDIC are designed to protect deposits at the national financial institutions residing in the country i.e. in case of a bank failure or other relevant cases.
Mendez while addressing the topic of crypto regulation in the country cited that the aforementioned institution in August offered cease-and-desist letters to the companies who allegedly made false representations about deposit insurance related to cryptocurrencies. He also questioned the agency’s approach towards risks from crypto companies and investor’s security under Gruenberg.
Refuting the senator’s question on the regulator’s approach, Gruenberg expressed that security is of prime importance to the organization. Further, he also explained that the organization had identified some crypto companies alongside other organizations in the sector that were engaged in misinterpretation. Hence the organization acted forcefully and sent them letters commanding them to cease and desist signifying that if the agencies didn’t comply would be subject to enforcement authorities available to FDIC under the law.
Gruenberg has been in-charge of FDIC since February this year, following the resignation of his predecessor Jelena McWilliams. Recently, the president of the country also announced Gruenberg’s nomination as the chair for the upcoming term.
However, this is not the first time Gruenberg has made the headlines in relevance to his approach towards the crypto sector. Earlier this year, he was put into question by Senator Pat Toomey on the grounds of banks in the U.S. being pressured by the regulator to forbid any services to cryptocurrency-related companies as reported by Todayq.