Former Solicitor General Donald B. Verrilli has recently accused US regulators of intentionally stifling the growth of the crypto industry through debanking practices. Verrilli, who now works as a senior legal strategist for Grayscale Investments, expressed his concerns in a joint amicus brief with Paul Clement, another former Solicitor General. This criticism highlights a growing bipartisan worry about the regulatory environment surrounding digital assets.
The amicus brief was filed on behalf of Custodia Bank, which is challenging a Wyoming district court’s decision to grant the Federal Reserve authority to deny them a Master Account. Verrilli and Clement argue that guidance from the Office of the Comptroller of the Currency (OCC) has placed significant limitations on banks’ interactions with crypto firms. These informal guidelines create stringent requirements that are challenging for banks to meet, ultimately hindering their ability to support the burgeoning crypto industry. The brief suggests that these debanking practices are a deliberate effort to stifle competition and innovation within the sector.
Verrilli’s criticism of the court’s decision in favor of the Federal Reserve underscores the significant challenges facing the crypto industry. The restrictive regulatory environment could impede the growth and development of digital assets in the United States, potentially causing the country to lose its competitive edge in the global crypto market. The joint support of Custodia Bank by Verrilli and Clement signals a shifting political landscape surrounding crypto, with bipartisan backing increasing as the November election approaches.
Digital assets have emerged as a key issue in the upcoming 2024 US elections, influencing political discourse and voter behavior. Advocates of the crypto industry are actively advocating for more favorable regulations and greater acceptance among lawmakers. This heightened political engagement from industry stakeholders and voters interested in digital assets has led to key political figures and presidential candidates aligning themselves with the sector. Former President Donald Trump and Democratic candidate Robert F. Kennedy Jr. have both embraced cryptocurrencies, accepting donations in digital assets and championing the rights of Americans to use and hold them.
The growing political alignment with the crypto industry is seen as crucial for mobilizing younger voters, who are more likely to invest in cryptocurrencies. Millennials and Generation Z constitute a significant portion of the crypto user base, and their support could play a vital role in close elections. A survey by the Crypto Council for Innovation revealed that a candidate’s stance on digital assets is important to many voters, with 83% preferring candidates who advocate for clear crypto regulations. Additionally, crypto entities are poised to spend over $80 million on the elections to support allies and push for favorable legislation within the industry.
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