Regulation

FDIC acting chair says no crypto firms or tokens are backed by agency

Federal Deposit Insurance coverage Company appearing chair Martin Gruenberg mentioned that the company doesn’t again any crypto companies in the USA, nor does its insurance coverage cowl losses from tokens.

In a Nov. 15 listening to of the Senate Banking Committee on the oversight of economic regulators, New Jersey Senator Bob Menendez said lawmakers have to “take a critical have a look at crypto exchanges and lending platforms” over dangerous habits. Gruenberg responded to Menendez’s questions confirming there have been “no cryptocurrency companies backed by the FDIC” and “FDIC insurance coverage doesn’t cowl cryptocurrency of any type.”

FDIC appearing chair Martin Gruenberg addressing the Senate Banking Committee on Nov. 15

FDIC insurance coverage usually protects deposits at monetary establishments in the USA within the occasion of financial institution failure or beneath different particular circumstances. Menendez cited the FDIC issuing cease-and-desist letters in August to corporations for allegedly making false representations about deposit insurance coverage associated to cryptocurrencies and questioned how the company, beneath Gruenberg, would deal with dangers from crypto corporations.

“This has been a key precedence for us,” mentioned Gruenberg. “Once we determine some corporations within the crypto area and others participating in misrepresentation, we acted very forcefully, sending letters demanding that they stop and desist and indicating that if they didn’t comply, we now have enforcement authorities out there to us beneath the regulation that we are able to carry to bear.”

Associated: Crypto adoption: How FDIC insurance coverage might carry Bitcoin to the plenty

Gruenberg has been serving as FDIC appearing chair since February following the resignation of former chair Jelena McWilliams. On Nov. 14, U.S. President Joe Biden introduced he could be nominating Gruenberg for a five-year time period as the subsequent FDIC chair. The appearing chair will even testify earlier than the Home Monetary Companies Committee on Nov. 16.

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