US House Majority Whip Tom Emmer has reiterated his concern that the federal government is “weaponizing” concerns around the banking industry to go after cryptocurrency.
In a letter dated March 15, Emmer called on Federal Deposit Insurance Corporation President Martin Gruenberg to answer questions about whether the government corporation has given specific instructions to banks not to provide services to crypto businesses, or suggested that doing so may be an "onerous" task ". The Minnesota representative Cited claims from Signature Bank board member and former US Representative Barney Frank, who reportedly called the FDIC's move against Signature a "strong anti-crypto message" rather than based on concerns about the bank's solvency.
“These actions to weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes, are profoundly inappropriate and could lead to broader financial instability,” Emmer said.
Today, I sent a letter to FDIC Chairman Gruenberg regarding reports that the FDIC is weaponizing recent instability in the banking sector to purge legal crypto activity from the US. pic.twitter.com/fDmaA0XGWv
— Tom Emmer (@GOPMajorityWhip) March 15, 2023
Emmer also took aim at the Biden administration, accusing policymakers of trying to “choke digital assets” out of the US financial system. The Minnesota representative has made similar claims before the collapse of Silicon Valley Bank and Signature Bank, in addition to speculating the United States government a central bank digital currency could be “easily weaponized” as a surveillance tool.
Related: Signature Bank and former directors sued by shareholders for alleged fraud
For many in the space, the recent banking crisis started with the parent company of Silvergate announcing on March 8 that it would “reduce operations” for the crypto bank. Silicon Valley Bank followed up on March 10 with its own bankruptcy after a run on deposits. Currency USD (USDC) issuer Circle reported $3.3 billion of its reserves to the bank, causing the stablecoin to temporarily de-peg from the dollar.
Some lawmakers and people in the space have suggested that Signature Bank's closure might have been a move led by government officials against cryptocurrency, as Barney Frank reported that there was "no fundamentally based insolvency" at the time. The New York State Department of Financial Services allegedly said on March 14 that the bank's closure "had nothing to do with cryptocurrency," citing the company's failure to provide "reliable and consistent data" to the regulator.
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