On Wednesday, the Office of the Comptroller of the Currency (OCC) released findings that raised alarm bells regarding the unbundling of cryptocurrencies, reigniting fears of what some are calling “Operation Chokepoint 2.0” within the financial sector.
This supervisory review focused on nine of the largest national banks subject to OCC supervision, including… JPMorgan ChaseBank of America, Citibank, Wells Fargo, U.S. Bank, Capital One, PNC Bank, TD Bank, and BMO Bank.
“Harmful banking policies”
the Preliminary results Reports from the OCC revealed troubling trends: between 2020 and 2023, these banks appeared to be unjustifiably discriminating between customers based on their lawful business activities.
Specifically, many of these institutions maintained policies that either restricted access to financial services or required heightened scrutiny and approvals for certain clients.
The OCC has identified examples where at least one bank has imposed restrictions on various sectors, including cryptocurrencies, due to their engagement in activities deemed “contrary to [the bank’s] Values,” even though those activities were not illegal.
Sectors affected by these policies included oil and gas exploration, coal mining, firearms, private prisons, tobacco and e-cigarettes, adult entertainment and, in particular, Digital assets.
The results indicated that many banks have placed strict restrictions on cryptocurrency-related activities as well, which often stems from concerns about financial crime.
The Financial Transactions Coordination Committee confirmed that these practices were prevalent in each of the banks included in the review. Comptroller Jonathan F. Gould expressed his frustration with the situation, saying:
It is unfortunate that the country’s largest banks believed that these harmful banking policies were an appropriate use of their government-granted charter and market power.
Gould noted that while many of these Policies It has been publicly announced, and some banks have confirmed that they were not involved in the bank break-up.
In his comments, Comptroller Gould emphasized OFCO’s commitment to eliminating practices that would “weaponize finance,” whether instigated by regulators or the banks themselves.
National banks to facilitate cryptocurrency transactions
The agency revealed that it is still assessing “thousands of complaints” related to allegations of dismantling of political and religious banks, with plans to report on these findings. “In due time.” The OCC aims to hold banks accountable for these actions and ensure that illegal banking practices do not continue.
This comes after Tuesday letter From the banking regulator allowing national banks to engage in “risk-free principal transactions” involving cryptocurrencies. This allows national banks to buy and sell cryptocurrencies for their clients’ accounts.
This new structure allows users to transact in crypto assets through established national banks, resulting in a more regulated environment than exchanges that operate outside of strict oversight.
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