FDIC Vice Chairman Takes Aim at Controversial SAB 121, Pushes for Regulatory Clarity
Federal Deposit Insurance Corporation (FDIC) Vice Chairman Travis Hill criticized the United States Securities and Exchange Commission’s (SEC) controversial SAB 121 while saying that the FDIC’s regulatory approach has “significant downsides” in remarks given on March 11.
Hill Takes FDIC’s Regulatory Approach
Speaking at the Mercatus Center at George Mason University, Hill particularly took issue with the FDIC’s lack of regulatory clarity, which he argued “contributed to a general public perception that the FDIC is closed for business if institutions are interested in anything related to blockchain or distributed ledger technology.”
Vice Chairman of FDIC criticizing U.S. restrictions on banks handling cryptocurrency #bitcoin $mstr $mara $riot $coin $jpm:
Travis Hill, vice chairman of FDIC, criticized US restrictions on banks handling digital assets for clients.
Hill, agency’s 2nd ranking person, said…
— Special Situations
Research Newsletter (Jay) (@SpecialSitsNews) March 11, 2024
“I recognize that sometimes it can be difficult for regulators to issue broadly applicable policy in areas where the technology is evolving quickly, but I think our goal should still be to provide as much clarity as is feasible regarding what is permissible and what we consider safe and sound,” Hill said.
SAB 121 Faces The Music
Similarly, the vice chairman expressed his disapproval at SAB 121, an accounting bulletin passed by the SEC that would require banks to list digital assets on their balance sheet.
“This treatment sharply departs from how custodians account for all other assets held in custody, which are generally held off-balance sheet and treated as the property of the customer, not the custodian,” Hill said of the SEC’s accounting bulletin. “On-balance sheet recognition triggers the full panoply of capital, liquidity, and other prudential requirements only for bank custodians, which makes it prohibitively challenging for banks to engage in this activity at any scale.”
Last month, the House Financial Services Committee voted in favor of a resolution that would see SAB 121 overturned if approved. The resolution is now awaiting a full vote from the floor of the House of Representatives.
FDIC Cracks Down On Crypto
Hill’s remarks come just months after the FDIC claimed cryptocurrencies presented “novel and complex risks” in its 2023 Risk Review report.
In December 2023, the FDIC approved a modernized advertising rule in hopes of cutting back on “misrepresentations” and “false advertising” regarding deposit insurance coverage.
Well well well#CelShortSqueeze100 #CELShortSqueeze420 #celshortsqueeze
cc: @otisa502 @ClassyCrypto_ @TheDustyBC @CeljayCel @CELCATOFFICIAL pic.twitter.com/gyXFJ8xmoC
— spinelpoeta (@spinelpoeta) August 24, 2022
“While the rule finalized today isn’t limited to the crypto industry, abuse by crypto has been rampant, forcing the FDIC to take multiple actions to stop it,” Dennis Kelleher, Co-founder and CEO of financial non-profit Better Markets, wrote in a statement shortly following the news.
“Investors were misled by Gemini Earn, FTX US, Voyager Digital, and other crypto firms into believing their investments were FDIC insured,” Kelleher continued. “We applaud the FDIC’s action to update and strengthen the rules to address this misconduct.”
The post FDIC Vice Chairman Takes Aim at Controversial SAB 121, Pushes for Regulatory Clarity appeared first on Cryptonews.
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FDIC Vice Chairman Takes Aim at Controversial SAB 121, Pushes for Regulatory Clarity
Federal Deposit Insurance Corporation (FDIC) Vice Chairman Travis Hill criticized the United States Securities and Exchange Commission’s (SEC) controversial SAB 121 while saying that the FDIC’s regulatory approach has “significant downsides” in remarks given on March 11.
Hill Takes FDIC’s Regulatory Approach
Speaking at the Mercatus Center at George Mason University, Hill particularly took issue with the FDIC’s lack of regulatory clarity, which he argued “contributed to a general public perception that the FDIC is closed for business if institutions are interested in anything related to blockchain or distributed ledger technology.”
Vice Chairman of FDIC criticizing U.S. restrictions on banks handling cryptocurrency #bitcoin $mstr $mara $riot $coin $jpm:
Travis Hill, vice chairman of FDIC, criticized US restrictions on banks handling digital assets for clients.
Hill, agency’s 2nd ranking person, said…
— Special Situations
“I recognize that sometimes it can be difficult for regulators to issue broadly applicable policy in areas where the technology is evolving quickly, but I think our goal should still be to provide as much clarity as is feasible regarding what is permissible and what we consider safe and sound,” Hill said.
SAB 121 Faces The Music
Similarly, the vice chairman expressed his disapproval at SAB 121, an accounting bulletin passed by the SEC that would require banks to list digital assets on their balance sheet.
“This treatment sharply departs from how custodians account for all other assets held in custody, which are generally held off-balance sheet and treated as the property of the customer, not the custodian,” Hill said of the SEC’s accounting bulletin. “On-balance sheet recognition triggers the full panoply of capital, liquidity, and other prudential requirements only for bank custodians, which makes it prohibitively challenging for banks to engage in this activity at any scale.”
Last month, the House Financial Services Committee voted in favor of a resolution that would see SAB 121 overturned if approved. The resolution is now awaiting a full vote from the floor of the House of Representatives.
FDIC Cracks Down On Crypto
Hill’s remarks come just months after the FDIC claimed cryptocurrencies presented “novel and complex risks” in its 2023 Risk Review report.
In December 2023, the FDIC approved a modernized advertising rule in hopes of cutting back on “misrepresentations” and “false advertising” regarding deposit insurance coverage.
Well well well#CelShortSqueeze100 #CELShortSqueeze420 #celshortsqueeze
cc: @otisa502 @ClassyCrypto_ @TheDustyBC @CeljayCel @CELCATOFFICIAL pic.twitter.com/gyXFJ8xmoC
— spinelpoeta (@spinelpoeta) August 24, 2022
“While the rule finalized today isn’t limited to the crypto industry, abuse by crypto has been rampant, forcing the FDIC to take multiple actions to stop it,” Dennis Kelleher, Co-founder and CEO of financial non-profit Better Markets, wrote in a statement shortly following the news.
“Investors were misled by Gemini Earn, FTX US, Voyager Digital, and other crypto firms into believing their investments were FDIC insured,” Kelleher continued. “We applaud the FDIC’s action to update and strengthen the rules to address this misconduct.”
The post FDIC Vice Chairman Takes Aim at Controversial SAB 121, Pushes for Regulatory Clarity appeared first on Cryptonews.
Read More