US legislator accuses FDIC of using financial instability to undermine cryptocurrency

The failure of Signature Bank, Silicon Valley Bank, and Silvergate Bank has stunned many in the industry, but is the U.S. government attempting to “shut off digital assets”?

Tom Emmer, the majority whip of the United States House of Representatives, has restated his fears that the federal government is “weaponizing” banking sector issues to target cryptocurrencies.

In a letter dated March 15, Emmer asked Federal Deposit Insurance Corporation chief Martin Gruenberg to clarify if the government agency had advised banks not to give services to crypto businesses or warned that doing so may be “onerous.” The Minnesota congressman referenced comments made by former U.S. Representative and Signature Bank board member Barney Frank, who reportedly characterized the FDIC’s action against Signature as a “strong anti-crypto message” rather than a response to worries about the bank’s viability.

Recent volatility in the banking industry has been a catalyst for wider financial instability. Disastrous government expenditures and extraordinary interest rate rises have intensified this instability.

Emmer also accused Joe Biden’s administration of wanting to “shut off” digital assets from the U.S. banking system.

Many in the industry believe that the present financial problem started on March 8, when Silvergate’s parent firm said it would “wind down operations” for the crypto bank. 

Congressman Frank said, “there was no bankruptcy based on the fundamentals” at the time of Signature Bank’s closure. Several politicians and industry insiders have speculated that the suspension of Signature Bank was a deliberate government action against crypto.

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