Banks Shouldn’t ‘Punish’ Crypto Industry, Republican Senators Urge

A crackdown on digital-assets companies is reminiscent of a campaign targeting gun sales, Federal Reserve Chairman Jerome Powell was told.

AccessTimeIconMar 10, 2023 at 2:07 p.m. UTC
Updated Mar 10, 2023 at 5:32 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

An increasing regulatory crackdown on banks serving the crypto industry may be “punishing an entire industry,” four Republican senators said in a letter to U.S. regulators.

Discouraging the crypto sector could exceed regulators’ mandate and resembles “Operation Choke Point,” the 2013 operation where the Department of Justice investigated banks that did business with legal gun vendors, according to the Thursday letter.

“We are especially worried that overreaching behavior by the banking regulators will inevitably bleed into other legal industries,” said the letter to Federal Reserve Chairman Jerome Powell, Acting Comptroller of the Currency Michael Hsu and Federal Deposit Insurance Corp. Chairman Marty Gruenberg. “Any industry could be potentially 'disfavored,' based on a given regulator’s ideological perspective.”

“The problems of the few should not drive the harm of many,” senators Bill Hagerty (R-Tenn.), Mike Crapo (R-Idaho), Thom Tillis (R-N.C.) and Steve Daines (R-Mont.) said, noting that revelations of Bernie Madoff’s Ponzi scheme didn't lead to banks cutting off other asset managers. "Regulators should not be punishing an entire industry."

They asked for a response by March 24.

On Jan. 3, the three regulators warned they would take a “careful and cautious” approach to banks’ interactions with crypto companies following a spate of collapses. Two days ago, Silvergate Bank, a lender with heavy exposure to the sector, said it is shutting down.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.