On September 4, the US Federal Reserve imposed sanctions on United Texas Bank due to significant deficiencies in risk management and compliance with the Bank Secrecy Act. These measures raise questions about potential changes in cryptocurrency policy if Kamala Harris wins the presidential election.
Reasons and measures of sanctions
The Federal Reserve issued a cease and desist order against United Texas Bank due to 'significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically risk management and compliance with the Bank Secrecy Act.' To get back into compliance, the bank must develop a comprehensive plan, including ensuring adequate staffing and verifying the identity, source of wealth, and business activities of all customers.
Expert opinions
Dan Spuller, the Head of Industry Affairs at the Blockchain Association, noted that the Federal Reserve's actions are yet another example of Choke Point 2.0 policies under the Biden administration. These policies aim to hinder the operations of cryptocurrency-related businesses. Spuller compared this initiative to the original Operation Choke Point, which pressured banks into refusing service to politically controversial yet legal businesses like gun shops and cannabis dispensaries.
Possible implications for future policies
The Federal Reserve's actions cast doubt on potential changes in cryptocurrency policy if Kamala Harris wins the presidential election. Many Democrats hoped that transitioning from the Biden-Harris administration to Harris-Walz would lead to a more positive approach toward cryptocurrencies. However, Harris has yet to state her position on this issue. Even the Democratic Party's 2024 platform does not mention cryptocurrency policy, while the Republican platform includes specific plans to support the industry.
The actions by the Federal Reserve and Kamala Harris's lack of a clear stance on cryptocurrency policy leave the market uncertain about future changes. So far, there are no signs pointing to a significant deviation from the current Biden-Harris policies.
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