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The chief lawyer of U.S. crypto exchange Coinbase (COIN) testified about the abuse of authority from regulators who erected barriers between banks and crypto firms in a hearing of the House Financial Services Committee on Thursday, marking the latest advance in the digital assets industry’s reversal of policy resistance in Washington. Coinbase Chief Legal Officer Paul Grewal’s complaints about “regulation by exhaustion” were met with wide agreement from Republican lawmakers eager to criticize the Biden administration’s crypto performance. The lawmakers also agreed with Grewal’s view that financial regulators such as the FDIC publicly insisted that they weren’t against crypto while privately directing banks away from the industry. The House hearing, led by the panel’s oversight subcommittee, came directly on the heels of a Wednesday Senate Banking Committee hearing that also dug into crypto “debanking” in the U.S. “Biden regulators resorted to vague, interpretive regulatory letters threatening banks with negative examination scores and fines if they continue their partnership with digital asset companies,” said Representative Dan Meuser, a Pennsylvania Republican who leads the House subcommittee. “This is serious overreach, one that not only undermines innovation, but directly harms consumers by restricting their access to new and beneficial financial products.” Meanwhile, the panel’s Democrats flagged concerns with President Donald Trump’s own crypto business efforts and pushed back on the argument that cautioning banks against ties with the volatile, fraud-ladened sector was appropriate. “Regulators asking banks to consider the risk associated with the crypto currency industry does not amount to debanking, as my Republican friends are indicating,” said Representative Al Green, a Texas lawmaker who is the subcommittee’s ranking Democrat. “Regulators simply urged banks to exercise caution when dealing with this emerging and potentially risky industry.” A frustrated judge As the issue was placed under the light of congressional scrutiny for the second…

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Filed under: News - @ February 7, 2025 2:26 am