Efforts to ‘debank’ crypto in full swing? Here’s what’s going on

• Former Solicitor General Donald B. Verrilli criticizes regulators for targeting crypto with debanking efforts.
• Bipartisan support for crypto regulation is seen ahead of the 2024 U.S. presidential election.

As the United States moves closer to the 2024 presidential election, a significant development has emerged regarding crypto regulation.

Former Solicitor General under the Obama Administration, Donald B. Verrilli, has entered the discussion. 

Verrilli’s positive crypto outlook

Fox Business journalist Eleanor Terrett, in her X (formerly Twitter) post dated the 5th of July, highlighted Verrilli’s stance, revealing his criticism towards regulators intentionally targeting crypto for debanking. 

He said, 

“Despite the digital asset industry’s pressing need for banking services, federal regulators have waged a concerted, coordinated campaign to debank the industry.”  

Further in the thread, Terrett highlighted Donald Verrilli’s perspective on the ongoing legal battle involving Custodia Bank and the Federal Reserve.

For context, the dispute revolves around the Federal Reserve’s refusal to grant Custodia Bank a Master Account.

Political shift

Despite their historical disagreements in various Supreme Court cases, Verrilli, along with Paul Clement, former Solicitor General under President Bush, have joined forces to support Custodia Bank’s legal challenge against the Federal Reserve.

They criticized the Comptroller of Currency (OCC) informal guidance, which effectively restricts banks from engaging with crypto firms.

This alignment indirectly advocates for the cryptocurrency industry, marking a significant bipartisan stance amid their legal careers.

Reiterating the same, Terrett added, 

“This is yet another indication of the changing political landscape around crypto – it’s gaining more bipartisan support heading into the November election.”  

Gensler’s and Biden’s anti-crypto moves

In recent months, the SEC’s ongoing scrutiny of prominent firms like Ripple [XRP], Coinbase, and Consensys has drawn significant criticism.

Needless to say, many believed that the anti-crypto sentiment isn’t just limited to President Joe Biden but extends to SEC Chair Gary Gensler as well.

This sentiment was underscored by Gensler’s recent remarks, where he stated, 

“Crypto is a small piece of our overall markets. But, it’s an outsized piece of the scams and frauds and problems in the markets.”  

However, not everyone believes that crypto is a partisan issue in the upcoming election. According to Mike Novogratz, founder and CEO of Galaxy Digital,

“Crypto should be Bipartisan and it needs to be Bipartisan.”

And, hence taking an impartial stance, he put it best when he said, 

“No matter who wins the next election, we’re going to get positive crypto legislation – I know that.”