TechFlow reported on September 12, citing Cointelegraph, that the U.S. Federal Reserve (Fed) issued a cease-and-desist order to United Texas Bank—an institution known for its crypto-friendly stance—on September 4. This move has sparked industry concerns over tightening regulatory policies and added uncertainty regarding Vice President Kamala Harris's position on cryptocurrency policy.
In its statement, the Fed pointed out "significant deficiencies" in United Texas Bank’s operations related to foreign correspondent banking and virtual currency customer management, particularly in risk management and compliance with the Bank Secrecy Act. The Fed required the bank to develop a comprehensive plan, including measures such as ensuring adequate staffing and customer due diligence. Dan Spuller, Director of Industry Affairs at the Blockchain Association, suggested this action could be part of the Biden administration’s so-called “Operation Choke Point 2.0.”
In recent years, the Biden administration has implemented a series of measures restricting the development of the cryptocurrency industry, including discouraging banks from holding crypto assets, proposing a 30% tax on energy costs associated with cryptocurrency mining, and rejecting regulatory applications from crypto-friendly banks. The U.S. Securities and Exchange Commission (SEC) has also frequently taken enforcement actions against the crypto sector. While some Democrats had hoped that a transition from the Biden-Harris administration to a potential Harris-Walz administration might bring a more favorable cryptocurrency policy, Harris has not yet made any clear statements on the issue during her campaign. Notably, the 92-page Democratic Party platform for 2024 does not mention cryptocurrency policy at all—a sharp contrast to the Republican Party’s clearly defined stance in this area.
