Banking Victory for Cryptocurrencies in the USA: Regulator Takes a Step Back! - Coin Bulletin

The Office of the U.S. Monetary Union Comptroller (OCC) has announced that it has ended its reputational risk reviews following backlash from the crypto industry.

The OCC said on Thursday that the supervisory process for national banks and other financial institutions will focus on "appropriate risk management processes" and will not judge specific activities. "The OCC has never used nominal risks as a comprehensive justification for its audit actions," said Rodney E. Hood, the OCC's incumbent head of auditors. He also stressed that future reviews by the OCC will be conducted in a way that makes it clear that the OCC did not make the bank decisions.

The statement indicated that the OCC would remove reference materials related to its credit risk from handbooks and guides, but its expectations regarding how banks manage risks would not change. By announcing that crypto activities would be allowed within the federal banking system, the OCC took a significant step back from its previous stance.

The crypto sector and legislative bodies indicate that digital asset firms face unique challenges in opening and maintaining bank accounts in the U.S. Last week, the Senate Banking Committee voted on a bill that would eliminate the use of reputational risk as a tool for the oversight of financial institutions. This vote occurred in a bipartisan manner, but no Democrat supported this bill.

Custodia Bank CEO Caitlin Long stated that the OCC's announcement regarding the removal of the reputational risk is a correct step. Long said, "This was a subjective situation and was used as a weapon by some politically motivated officials against sectors and individuals they did not like."