A rumor is circulating in the community that US authorities are about to take action to “suppress” activities between banking and crypto. Paxos has voiced reassurance about this information.
Yesterday, February 8, 2023, the crypto Twitter community began to spread rumors that the Federal Reserve (Fed) and the Office of the Comptroller of the Currency (OCC) are about to take some serious regulatory action against the crypto Twitter community. with crypto banking operations.
Starting from a newspaper reporter Fortune reported:
Are Paxos and Protego about to have their applications for a national bank trust charter denied by the OCC?
I wrote about the critical current moment for crypto banking, which @nic__carter likened to “Operation Choke Point,” and the ensuing rumor millhttps://t.co/43sWBX8hGb
— Leo Schwartz (@leomschwartz) February 8, 2023
“Several sources say that OCC is about to reject Paxos and Protego’s application for approval of a national trust bank charter.”
I don’t want to alarm, but since the turn of the year, a new Operation Choke Point type operation began targeting the crypto space in the US. it is a well-coordinated effort to marginalize the industry and cut of its connectivity to the banking system – and it’s working
— nic carter (@nic__carter) February 7, 2023
“I don’t want to give bad news but there are some new regulatory actions that are targeting the crypto industry in the US.
Cutting the link between the banking system and crypto seems like a viable way to get rid of crypto.”
**more sources**: @PaxosGlobal and others were told by the OCC to either withdraw their banking charter applications or they would be denied by Friday.
“VC’s are starting to become very, very concerned that their crypto portfolio companies are being de-banked en masse.”
— Andrew (@AP_Abacus) February 8, 2023
“The Fed and OCC are set to have a major impact on crypto banking operations.
As my source said:
“These actions will be draconian and could destroy the crypto industry.
Furthermore, Paxos and other crypto companies were asked by the OCC to withdraw their application for approval of the national trust bank charter. Otherwise, OCC will also reject the application this Friday.
In addition, investment funds are also very worried because many of the companies in their portfolio are being suppressed by mass crypto banking.”
These rumors quickly received great attention because the community is currently quite sensitive to legal regulations in the US.
After the FTX crash and former CEO Sam Bankman-Fried (SBF) in legal trouble, in January this year the US warned banks to be exposed to the crypto sector. Even US officials are investigating the relationship between “crypto bank” Silvergate and FTX.
As of today, February 9, the company mentioned above, Paxos, has clarified about the “trouble” rumor with OCC. Specifically, Paxos said:
To clarify speculation: Paxos has not been asked to withdraw its application for a national trust bank charter from the OCC, nor has it been denied the charter. Paxos continues to work constructively with the OCC.
— Paxos (@PaxosGlobal) February 8, 2023
“To correct the recent rumors:
Paxos was not asked to withdraw its application by the OCC, nor was it denied an application for a bank charter approval.
Paxos is still actively working with OCC.”
Paxos received conditional approval from the OCC in April 2021, to split Paxos into two separate companies. Consists of 1 company operating as a national bank and 1 company maintaining the current structure. Provided that Paxos must complete the business plan for submission to OCC within 18 months.
However, Paxos was unable to fulfill that condition. So now the company is still continuing to apply for new approvals.
Synthetic Kyptos
