Blockchain Association Requests Information on De-Banking of Cryptocurrency Companies

03/17/2023 02:11 • Blockchain Buzz • 133 views

It is reported that the Blockchain Association, a lobbying group in the encryption industry, has submitted a Freedom of Information Act (FOIA) request to the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors, and the Office of the Auditor General, seeking documents and communications involving the de banking of cryptocurrency companies in the United States. BA is investigating allegations of de banking, including closing accounts and refusing to open new ones, as well as actions that regulators may have mishandled to the collapse of Signature, Silicon Valley Bank, and Silvergate.

Encryption industry lobbying groups seek de banking information for legitimate encryption businesses

Analysis based on this information:

The Blockchain Association, a lobbying group in the encryption industry, has recently made a Freedom of Information Act (FOIA) request to three federal agencies in the United States. These agencies are the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors, and the Office of the Auditor General. The request is asking for documents and communications involving the de-banking of cryptocurrency companies in the US. The purpose of the request is to investigate allegations of de-banking and mishandling of regulations that led to the collapse of Signature, Silicon Valley Bank, and Silvergate.

De-banking refers to the practice of closing bank accounts or refusing to open new accounts for businesses, usually because of regulatory concerns. Cryptocurrency companies have been a target of de-banking because they are often considered high-risk businesses due to the perceived association of cryptocurrencies with criminal activities like money laundering and terrorist financing. However, the de-banking of cryptocurrency companies has raised concerns about financial exclusion and unfair treatment of legitimate businesses. The Blockchain Association is seeking information to understand the reasons behind de-banking and how regulators are handling it.

The request made by the Blockchain Association reveals its role as a lobbying group that advocates for the interests of the blockchain and cryptocurrency industry. By seeking information from federal agencies, the Association is attempting to influence policy and promote a better understanding of the challenges faced by cryptocurrency businesses. The information obtained from the FOIA request may be used to support the Association’s lobbying efforts and to raise awareness among policymakers and the general public about the importance of a regulatory environment that is friendly to innovation and entrepreneurship.

The focus on the collapse of Signature, Silicon Valley Bank, and Silvergate suggests that the Blockchain Association is interested in exploring how regulators’ actions may have contributed to the failure of these institutions. This is a relevant concern because failures in the cryptocurrency industry can have systemic implications for the financial system, as seen in the case of the Mt. Gox exchange collapse in 2014. By understanding the regulatory challenges faced by these institutions, the Association may be able to propose solutions that prevent future failures and promote stability in the cryptocurrency market.

In conclusion, the FOIA request made by the Blockchain Association is an attempt to shed light on the de-banking of cryptocurrency companies and the regulatory challenges faced by the industry. The Association’s focus on the collapse of key institutions suggests a broader concern for the stability of the cryptocurrency market and the role of policymakers in promoting a regulatory environment that fosters innovation and entrepreneurship.

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