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US Lawmaker Claims FDIC Exploits Banking Instability to Target Crypto

US lawmaker Tom Emmer accuses the FDIC of exploiting banking instability to undermine the crypto industry amid recent bank collapses.

Tom Emmer, Member of the United States House of Representatives
Tom Emmer, Member of the United States House of Representatives

Tom Emmer, the majority whip of the United States House of Representatives, has expressed concern that the federal government is "weaponizing" issues around the banking industry to target crypto. In a letter to Federal Deposit Insurance Corporation (FDIC) chair Martin Gruenberg, Emmer demanded answers regarding the government corporation's alleged instructions to banks about providing services to crypto firms.

Signature Bank's Collapse Viewed as Anti-Crypto Message

Emmer cited comments from Signature Bank board member and former US Representative Barney Frank, who claimed the FDIC's action against Signature Bank was a "strong anti-crypto message" rather than a concern about the bank's solvency. Emmer argued that such inappropriate actions could lead to broader financial instability.

Biden Administration Accused of Choking Off Digital Assets

The Minnesota representative accused the Joe Biden administration of trying to "choke off digital assets" from the US financial system. He had made similar claims before the collapse of Silicon Valley Bank and Signature Bank. He speculated that the US government could "easily weaponize" a central bank digital currency as a surveillance tool.

Joe Biden
Joe Biden

Recent Banking Crisis and Its Impact on Crypto

The recent banking crisis began with Silvergate's parent company announcing the winding down of operations for the crypto bank. Silicon Valley Bank's failure followed this after a run on deposits, which temporarily affected the USD Coin issuer Circle's stablecoin peg to the dollar.

Signature Bank Shutdown Possibly Targeted at Crypto

Some lawmakers and industry insiders suggest that Signature Bank's shutdown could have been a targeted move by government officials against crypto. Representative Frank stated that "there was no insolvency based on the fundamentals" at the time. However, the New York State Department of Financial Services denied any connection to crypto, citing the bank's failure to provide "reliable and consistent data" to the regulator.