The Office of the Comptroller of the Currency (OCC) has announced the discontinuation of bank audits based on reputational risk, potentially accelerating the integration of crypto businesses into the financial system.
Impact on the Crypto Sector
This change signals a more accommodating stance towards crypto companies. Rodney E. Hood, the interim head of audits, clarified that the agency has always focused on banks' individual risk management frameworks.
Support for Banking Services for Crypto Companies
U.S. cryptocurrency companies have long faced difficulties in establishing and maintaining bank accounts. Industry leaders pointed to reputational risk as a significant barrier. A recent bill passed by the U.S. Senate Banking Committee aims to prohibit federal audits based on reputational risk.
Legislative Amendments and Community Reaction
The OCC's decision was welcomed by the crypto community, which has previously faced restricted banking access. Caitlin Long, CEO of Custodia Bank, praised the decision, stating that the previous practice was a misuse of reputational risk against certain industries.
The OCC's refocusing of its audit approach could significantly alter the banking landscape for crypto companies, facilitating their greater integration into the financial system.
