Blockchain Association Initiates FOIA Request to Investigation Allegations of De-banking Crypto Companies

03/17/2023 02:11 • Crypto & Markets • 71 views

It is reported that the Blockchain Association, a lobbying group in the encryption industry, has submitted a Freedom of Information Act (FOIA) request to the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors, and the Office of the Auditor General, seeking documents and communications involving the de banking of cryptocurrency companies in the United States. BA is investigating allegations of de banking, including closing accounts and refusing to open new ones, as well as actions that regulators may have mishandled to the collapse of Signature, Silicon Valley Bank, and Silvergate.

Encryption industry lobbying groups seek de banking information for legitimate encryption businesses

Analysis based on this information:

The Blockchain Association, a lobbying group in the cryptocurrency industry, has initiated a Freedom of Information Act (FOIA) request to the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors, and the Office of the Auditor General. The request involves the submission of documents and communications pertaining to the de-banking of cryptocurrency companies in the United States. De-banking is a term that describes the action taken by banks to close accounts and refuse to open new ones for cryptocurrency companies. This is a common practice for banks that perceive cryptocurrency businesses as high-risk due to regulatory uncertainty and money-laundering risks.

The Blockchain Association is investigating allegations of de-banking and any mishandlings by regulators that may have contributed to the collapse of Signature Bank, Silicon Valley Bank, and Silvergate Bank. These banks had been heavily involved in servicing cryptocurrency companies but have since withdrawn their custodial services. It is reported that the investigation is aiming to establish whether regulators played any role in the de-banking of crypto companies or if banks’ actions are a result of market forces.

The Blockchain Association seeks to obtain transparency in the process and compel the regulators to provide clear guidance on the provision of banking services to cryptocurrency companies. The Association, founded in 2018, represents the interests of blockchain technology companies in the US, who are pushing for a regulatory framework that is friendly to the growth of the cryptocurrency industry.

This FOIA request is essential because, without access to these documents, the Blockchain Association and the industry at large will only be making assumptions and relying on conjecture, which does not serve to benefit the industry or the regulators. The de-banking of cryptocurrency businesses may end up hurting the blockchain industry, which is a fast-growing industry that needs banking services to thrive.

In conclusion, the Blockchain Association’s FOIA request to investigate allegations of de-banking of cryptocurrency companies, including the alleged role of regulators in the process, is a much welcome, proactive move. The Association is seeking to provide a sense of overall transparency in the industry, establish clear guidelines on banking services offered to cryptocurrency companies, and ultimately improve the overall state of the market.

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