U.S. Sen. Pat Toomey (R-Pa.) suggested on Tuesday that the Federal Deposit Insurance Corporation (FDIC) may be exerting pressure on banks to forbid them from offering services to bitcoin businesses.
Toomey claimed in a letter to Acting FDIC Director Martin Gruenberg that he had heard from “affected parties” and whistleblower communications that the federal bank regulator had attempted to “deter banks from doing business with lawful cryptocurrency-related companies,” despite the fact that offering services to these businesses are not prohibited. Toomey requested information from the watchdog to check whether any FDIC officials had in fact instructed banks to avoid doing business with cryptocurrency startups and, if so, to detail their reasoning.
“According to whistleblower communications that we have corroborated, personnel in the FDIC’s Washington, D.C. headquarters are urging FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto-related companies, without providing any legal basis for sending such letters,” Toomey wrote. He also alleged that “a bank planned to give customers access to a crypto-related company’s trading platform via the bank’s mobile or internet banking app.”
Toomey cited “Operation Choke Point,” a former FDIC and Department of Justice initiative whose stated goal was to pressure banks not to provide services to payday lenders and financial fraud allegations, but which also seemed to pressure banks not to provide services to businesses engaging in legal activities like gun sellers.
A regional office was allegedly told by FDIC officials to “downgrade” the rating of a bank loan provided to a cryptocurrency startup, which Toomey described as “highly atypical.”
The regulator has previously issued statements warning banks against doing business with cryptocurrency firms.