Fed cuts ‘reputational risk’ scrutiny used to ‘assassinate’ crypto firms

Under Operation Chokepoint 2.0, more than 30 technology and crypto companies were denied banking services in the US after the collapse of crypto-friendly banks in 2023.

The US Federal Reserve said it has directed its supervisors to no longer consider “reputational risk” in its oversight of banks, which the crypto industry had long argued was used to unfairly target and debank crypto firms.

Industries deemed risky face significant challenges in establishing or maintaining banking relationships, and this was seen driving the so-called Operation Chokepoint 2.0 when more than 30 technology and crypto companies were denied banking services in the US. 

In a statement on Monday, the Federal Reserve Board said it has started reviewing and removing references to reputation and reputational risk from its supervisory materials and replacing them with more “specific discussions” around financial risk.

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