Grumbling About Gruenberg; OCC Takes A Fintech Hit

grumbling about Gruenberg

The tenure of Martin Gruenberg at prudential bank regulator Federal Deposit Insurance Corporation (FDIC) remains on shaky ground as the agency’s embarrassing harassment scandal continues to envelop the Chairman, who is a Democrat. Last Wednesday, Republican members of the House Financial Services demanded he recuse himself from any internal investigation. Is Gruenberg’s resignation imminent? TradFi publication American Banker doesn’t think so – yet.  The Biden Administration reportedly won’t bail on their appointee unless things get worse.

fintech fumble at OCC

The Office of the Comptroller of the Currency (OCC) appointed a much-heralded deputy comptroller and chief financial technology officer, Prashant Kumar Bhardwaj, last April. He was to be the first person at the OCC to specifically police fintech firms and the banks that power them – except his resume was allegedly a fraud. Read more in the Information.

Sometime between June and August, a few months after being hired, Bhardwaj was quietly replaced by an OCC insider.

Will OCC’s Acting Comptroller Michael Hsu, a Democrat, feel some Congressional heat soon?

more tips:

What Happened to the OCC’s Chief Fintech Officer? (Sept. 10) – Fintech Business Weekly

event this week

Blockchain Association is producing its Policy Summit in D.C. this Wednesday and Thursday with a robust, bipartisan agenda containing Members and their staff. See it.

Two notable additions to the speaker list are the ubiquitous Deputy Secretary of the Treasury, Wally Adeyemo (D), and Rep. Sean Casten (D, IL). Both represent, arguably, the opinions of the Biden Administration and have played an active role recently in trying to connect cryptocurrency to the financing of the terrorist organization Hamas.

Read Adeyemo’s remarks in the UK on Oct. 27.

Rep. Casten was a lead signer of Senator Warren’s Oct. 18 letter to the White House on terrorist financing and cryptocurrency. Maybe Casten – usually a well-spoken and pugnacious lawmaker – can answer at this week’s event what happened here (HFS hearing, Nov. 15)?

more tips:

Blockchain Association senior counsel Marisa Tashman Coppel talks legislative landscape on the Thinking Crypto podcast. She notes the importance of the Coinbase-SEC court case going to trial in January. View it on YouTube.

last week – Kraken

Last Monday, US-based cryptocurrency platform Kraken was charged again by the SEC. This time it’s a lawsuit (release) similar to the one levied against U.S. competitor Coinbase where the company is charged with “unlawfully facilitating the buying and selling of crypto asset securities.” Since the SEC views nearly all crypto tokens as securities,  in theory, it would be hard for a digital assets exchange operator NOT to get charged by the regulator. Read more in CoinDesk.

It was just last February that the SEC was “Kraken Down” on the company for its staking services which it has since abandoned for U.S. customers.

more tips:

Kraken continues to fight for its mission and crypto innovation in the United States – Kraken

last week – Binance

Last Tuesday, cryptocurrency platform Binance incurred a $4.3 billion fine and their CEO Changpeng “CZ” Zhao was forced to step down in a settlement related to money laundering charges. Treasury (release), Justice (release) and the Commodity Futures Trading Commission (release) were involved but not the Securities and Exchange Commission (SEC). Is the SEC next to bring the hammer? Read more from Leo Schwartz of Fortune.

Senator Warren tweeted about the Binance charges: “This is part of a larger trend of criminal activity in the crypto industry and sadly predictable.” She vowed to continue to build support for her Digital Asset Anti-Money Laundering bill [S.2669], which would take the cryptography out of crypto. Meanwhile, Better Markets’ CEO Dennis Kelleher channeled his inner “Gen  Z” on X saying, “OMG, this is nuts…the [crypto] book is nothing but pages of predatory, illegal & criminal activity…” And Derek Robertson of Politico wrote, “The deal forces crypto to reckon with its biggest questions: How ‘law-abiding’ can an industry really be when it’s inherently designed to evade surveillance and reporting?” Oof.

more tips:

The Feds Did Not Go Easy on CZ – Slate

still more tips

Bank of Korea, BIS concerned Visa, Mastercard might launch stablecoins – Ledger Insights

Austria’s Raiffeisen Bank to Roll Out Crypto Trading for Retail Customers in January – CoinDesk

Our Updated Guide to OpenAI, Sam Altman, What Happened and What’s Next – The Wall Street Journal