TL;DR Breakdown
- US regulator calls out Binance, Tether for more scrutiny.
- Says growth in crypto market has led to growth in crypto scam.
The United States acting Comptroller of Currency, Michael J. Hsu, has singled out Binance and Tether as crypto firms that pose too many risks in the blockchain space.
He made the remark at the American Fintech Council’s 2021 Policy Summit, where he focused heavily on the lack of consolidated regulatory oversight for crypto firms and said large, universal crypto firms—especially issuers of highly-circulated stablecoins—should embrace comprehensive, consolidated supervision.
Hsu said that federal and state bank regulators should prioritize the development of policies, staff, and supervisory approaches to bring such firms safely into the bank regulatory perimeter. “This would clearly differentiate safe and sound crypto firms from those that are regulated only partially and have a history of control lapses, such as Binance and Tether.”
In the past, Hsu has also harped on the issue of a lack of coordinated effort across agencies to clarify rules of the road and regulate crypto firms. To that end, he set up a “crypto sprint” between the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation.
Why crypto should be closely watched – Hsu
The acting Comptroller of Currency said that the crypto space needs to be closely watched as the rapid growth in users and total market value has only been matched by the growth in scams and consumer complaints. He said ‘Move fast and break things is a common mantra in tech. It is important to remember that those “things” are people and their money.”
In coordination with other regulators, the OCC is expected to issue guidance to banks on how to hold cryptocurrency assets soon.
Before Binance, HSU and Tether
Hsu has been on the neck of stablecoin issuer, Tether since January. Then, Hsu said regulators are looking into Tether’s stockpile of commercial paper to see whether each Tether (USDT) token really is backed by the equivalent of one U.S. dollar.
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