​Analyst Colin Wu learns about US authorities’ operation to de-bank crypto companies

What’s new? Analyst Colin Wu, citing sources, reported that the Federal Reserve System (Fed) and the US Treasury Department’s Office of the Comptroller of the Currency (OCC) are conducting a massive operation to de-bank crypto companies. According to him, the OCC urged New York-based fintech company Paxos Trust Company and other firms to withdraw their applications for banking licenses. Paxos denied the rumors, saying that the company continues to cooperate constructively with the regulator.

Community rumors that the Fed and OCC are in the midst of a massive crypto de-banking operation, Paxos and others were told by the OCC to either withdraw their banking charter applications or they would be denied by Friday. By @AP_Abacus. Paxos denied the rumors. — Wu Blockchain (@WuBlockchain) February 9, 2023

Crypto community’s reaction. Castle Island Ventures partner Nic Carter said that this is a coordinated effort by the Fed, other regulators, and the White House to suppress the crypto industry and deprive access to banking services.

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

What is known about Paxos? The company was founded in 2012, its activities are regulated by the New York State Department of Financial Services (NYSDFS). The organization uses tokenization, storage, trading, and settlement technologies for digital assets for corporate clients. In March, it was licensed by the Central Bank of Singapore. In August, it announced the launch of a cryptocurrency exchange jointly with PicPay, a Brazilian payment app. In October, it began preparing to launch a platform for trading cryptocurrency through banks jointly with Mastercard.

In early February, the US Commodity Futures Trading Commission (CFTC) said it intends to tighten regulation of the digital asset industry and create many “precedent-setting cases” in 2023. The Securities and Exchange Commission (SEC) is also going to keep a close eye on the crypto industry. The regulator named digital assets as the top priority for the coming year and announced audits of brokers and investment advisers.