Former FDIC Regulator: Crypto is a Threat to Our Economy

Since the bank collapses, efforts to keep crypto companies from the U.S. banking system may have been stepped up. Jason Brett, speaking to CoinDesk TV’s “First Mover” program, said he believes the banks are using the collapses as an excuse to push crypto companies out of the system.

Former FDIC Regulator Crypto is a Threat to Our Economy

Jason Brett, a former regulator at the Federal Deposit Insurance Corporation (FDIC), says that U.S. regulators may be using recent turmoil in the financial world as a way to kick crypto companies out of the banking system.

Cryptocurrencies have not received the friendliest of receptions from governments and financial institutions around the world. In a recent interview, Brett, a regulatory analyst for digital assets at Forbes, commented on the lack of friendliness towards crypto by governments and financial institutions. “It just does not exist,” he said.

Silvergate Bank, based in California, has announced that it will be liquidating its assets and closing its doors. This is a huge loss for the state, as the bank was a major player in the local economy. The closure is a huge blow to the community, as it leaves many people without a reliable source of banking services.

The past Sunday, two major banks were closed by state regulators. Silicon Valley Bank, a go-to institution for venture-backed tech startups, was taken over by the California Department of Financial Protection and Innovation, which said the firm had “inadequate liquidity and insolvency.” New York-based Signature Bank was closed by state regulators in what they called an effort “to protect investors.” Like Silvergate, Signature Bank operated its own real-time payments platform, Signet.

The FDIC has taken receivership of SVB and Signature, giving the agency discretion to manage the bank’s assets and liabilities.

According to Brett, the federal regulators have been trying to keep crypto companies from accessing the U.S. banking system for a while now. This is in response to the recent bank collapses.

At the conference, he mentioned former FDIC Chairman Jelena McWilliams, appointed by former President Donald Trump. McWilliams was a big fan of crypto and was pushing that at the FDIC. She resigned effective Feb. 4, 2022, according to her letter to current President Joe Biden.

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