Odaily Planet Daily News Former SEC Internet Enforcement Director John Reed Stark said on X that the US cryptocurrency field is suffering from "unprecedented financial regulatory shocks."
Stark began by highlighting the Federal Reserve's "New Activity Regulatory Initiative" launched on Aug. 8. Part of the plan, Stark said, is to regulate U.S. banks’ participation in dollar-backed tokens, such as the recently launched PYUSD or other stablecoins. This will be a "challenging" task for most traditional banks, as the Fed will judge their ability to manage the numerous risks associated with these tokens. These risks include money laundering, customer churn and hacking.
Stark pointed to another traditional regulator, the Federal Deposit Insurance Corporation (FDIC), for its “aggressive” cryptocurrency regulation. In April 2022, the FDIC wrote a Financial Institution Letter (FIL) to all FDIC-regulated banks, instructing them to notify the agency before engaging in any crypto-related activity.
Stark believes that U.S. cryptocurrency users should regard the above-mentioned FIL as a "herald" for the FDIC to strengthen supervision of all bank-related cryptocurrency transactions. Additionally, Stark alerted the industry to another similar order issued by the U.S. Office of the Comptroller of the Currency (OCC). (Bitcoinist)