The post FDIC Removes Reputational Risk in Crypto Business Banking – Coincu appeared on BitcoinEthereumNews.com.

Key Points: The FDIC will no longer consider reputational risk in its regulations related to handling crypto firms. This change is expected to improve banking access for cryptocurrency organizations. Market participants anticipate this move will bring beneficial changes for legitimate crypto enterprises. FDIC Removes Subjective Banking Standards for Crypto Firms On March 25, 2025, David Sacks announced that the Federal Deposit Insurance Corporation (FDIC) would eliminate “reputational risk” as a factor in bank regulation for cryptocurrency businesses. This marks a shift from a subjective standard often criticized for blocking legitimate crypto firm banking services. The decision is significant as it aligns FDIC practices with calls for objective assessments. This change could lead to broader banking access for cryptocurrency companies often denied services due to “Operation Choke Point 2.0.” FDIC’s Objective Shift David Sacks, serving as the U.S. cryptocurrency and AI chief, highlights the FDIC’s removal of the reputational risk factor as crucial. Reputational risk has been interpreted as the chance that negative press, whether true or not, can harm financial institutions’ business. Dropping this factor is seen as a win for transparency and banking access. Critics suggest it led to unfair denial of services to crypto firms. Highlighting the importance of transparency, Sacks cites this decision as aligning bank regulation with objective standards. With the reputational risk elimination, numerous crypto businesses could find increased access to essential banking services. Enhanced banking opportunities can now potentially stimulate the industry. Market participants view the change as long overdue, anticipating improved conditions for legitimate entities. Market Implications Travis Hill, FDIC’s Acting Chairman, acknowledged previous resistance faced by banks wishing to engage with crypto businesses. According to Paul Grewal from Coinbase, the regime using reputational risk deterred banks from offering crypto services, creating constraints even for interested institutions. “What this proves is that the…

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Filed under: News - @ March 25, 2025 5:21 pm