All FDIC-supervised institutions have been asked to provide the federal banking regulator with information about their “crypto-related activities.”
A top U.S. banking regulator has asked banks to report on their “crypto-related activities,” citing potential “safety and soundness risks as well as financial stability concerns” resulting from exposure to crypto assets.
On Thursday, the Federal Deposit Insurance Corporation (FDIC) issued a financial institution letter – a letter sent to CEOs of FDIC-insured banks – requesting that banks should notify their regional FDIC director of their crypto activities. This request applies to both current and future crypto-related activities.
According to the letter, the FDIC will review the information, ask more questions if necessary, and then issue “relevant supervisory feedback.”
The new reporting requirements are a step-up from previous FDIC statements on crypto.
Under Acting Chair Martin Gruenberg, the banking regulator has issued warnings about the potential for the “rapid introduction of…digital asset products into the financial system” to pose systemic risks. In February, Gruenberg said the FDIC and other regulators needed to provide “robust guidance” to the banking industry on how to manage the risks posed by crypto.
Thursday’s letter is a signal that the banking regulator is now getting serious about cracking down on crypto.
Because the vast majority of banks – including every national bank – in the U.S. are FDIC-insured, the new requirements mean that nearly all banks with crypto exposure – including Wall Street titans like Bank of America and Goldman Sachs – must now disclose their crypto activities to the regulator.
The FDIC isn’t the only banking regulator turning its eye towards crypto-related banking activity.
Last month, Office of the Comptroller of the Currency (OCC) head Michael Hsu warned banks that trading crypto derivatives could result in extra regulatory scrutiny.