OCC Calls for International Cooperation on Crypto Rules – Banking Exchange
Regulators should collaborate at a global stage to supervise crypto-assets corresponding to cryptocurrencies, in response to the Workplace for the Comptroller of the Foreign money (OCC).
In a speech to the Institute of International Bankers on March 6, appearing comptroller Michael Hsu drew parallels between the collapse of crypto trade FTX and the 1991 demise of the Financial institution of Credit score and Commerce International (BCCI). The BCCI failure presaged elevated worldwide collaboration on financial institution oversight.
“While the details of FTX’s failure continue to unfold and not all of the facts have yet been revealed, there are striking similarities between BCCI and FTX,” Hsu mentioned.
“Each confronted fragmented supervision by a mix of state, federal, and overseas authorities. Each lacked a lead or ‘home’ regulator with authority and duty for creating a consolidated and holistic view of the companies.
“Both operated across jurisdictions where there was no established framework for regulators to share information on the firms’ operations and risk controls. Both used multiple auditors to ensure that no one could have a holistic view of their firms.”
Whereas Hsu acknowledged that worldwide regulatory work on crypto must be carried out “outside of banking regulatory channels”, he highlighted current work by a number of our bodies on crypto regulation.
Hsu joined different regulatory leaders in December in endorsing a framework and prudential requirements for banks’ crypto-asset exposures proposed by the Basel Committee on Banking Supervision.
“The rapid progress by the Basel Committee paves the way for a more consistent international approach to this new asset type and should help level the playing field,” Hsu mentioned.
The comptroller’s newest feedback come as Silvergate Financial institution has shut down its cryptocurrency switch service, Silvergate Exchange Community.
In an announcement on its homepage, the financial institution mentioned: “Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.”
The financial institution has not given any additional details about the transfer. It follows a wave of crypto firms chopping ties with Silvergate because it scrambles to recuperate from the cryptocurrency market turmoil of 2022 and the collapse of FTX.
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