Former Solicitor General Donald B. Verrilli, who previously served during the Obama administration, recently made headlines by accusing US regulators of intentionally stifling the crypto industry through debanking practices. Verrilli, who now works as a senior legal strategist for Grayscale Investments, expressed his concerns in a joint amicus brief filed with Paul Clement, a former Solicitor General under President George W. Bush. Their statement shed light on the bipartisan worries surrounding the regulatory environment for digital assets.
The amicus brief was filed on behalf of Custodia Bank, which is currently appealing a Wyoming district court’s decision that granted the Federal Reserve the authority to deny the bank a Master Account. Verrilli and Clement argued that the Office of the Comptroller of the Currency (OCC) has issued informal guidance that places restrictions on banks seeking to engage with crypto firms. Despite not being official, these guidelines set high standards that are challenging for banks to meet, ultimately impeding their ability to support the burgeoning crypto industry. The brief suggested that these practices are part of a deliberate campaign to debank the crypto industry, hindering competition and innovation.
Verrilli’s criticisms of the court’s decision in favor of the Fed as a significant setback for the crypto sector highlight the broader bipartisan alarm regarding the current regulatory approach towards digital assets. Fox Business journalist Eleanor Terrett covered Verrilli’s viewpoints, emphasizing the potential ramifications of the Fed’s ruling. Some analysts caution that without more adaptable regulations, the US may lose its competitive advantage in the global crypto market. Terret added that Verrilli and Clement’s support for Custodia Bank signals a shifting political environment surrounding crypto, with bipartisan endorsement growing as the upcoming November election draws near.
Digital assets have become a substantial topic in the lead-up to the 2024 US elections, influencing political discussions and voter behavior. Advocates of the crypto industry have been advocating for more favorable regulations and wider acceptance among lawmakers. This surge of interest has resulted in increased political engagement from industry stakeholders and voters intrigued by digital assets. Key political figures and presidential candidates are aligning themselves more closely with the crypto sector. Notably, former President Donald Trump has pledged to champion the interests of digital asset traders and is now accepting campaign contributions in cryptocurrencies. On the Democratic side, Robert F. Kennedy Jr. has also embraced cryptocurrencies, welcoming crypto donations for his campaign and advocating for Americans’ rights to use and hold digital assets.
This growing alignment with the crypto industry is deemed essential for mobilizing younger voters, who tend to be more inclined towards investing in cryptocurrencies. Recent data shows that Millennials and Generation Z represent a substantial segment of the crypto user base, and their backing could prove crucial in tight elections. A poll conducted by the Crypto Council for Innovation (CCI) revealed that a candidate’s stance on digital assets matters to many voters, with 83% of respondents preferring candidates who promote clear crypto regulations. Correspondingly, crypto entities are gearing up to spend over $80 million on the elections, aiming to bolster allies and advocate for legislation favorable to the industry.
The interplay between US regulators, the crypto industry, and political actors underscores the evolving landscape of digital assets in the United States. The accusations leveled by Verrilli and Clement shed light on the challenges faced by the industry, while the growing political support for cryptocurrencies indicates a significant shift in the country’s approach to regulating and embracing this innovative sector.
