24.06.2025 12:46
The US Federal Reserve has announced a significant policy shift, eliminating the consideration of "reputational risk" in its oversight of banks' relationships with cryptocurrency and technology companies. This move follows years of complaints from the crypto industry, which alleged unfair targeting and deliberate "de-banking" of firms due to perceived reputational risks associated with their operations. The decision marks a potential turning point for the sector.
Over thirty US technology and cryptocurrency businesses experienced banking service disruptions under what was effectively Operation Chokepoint 2.0, a phenomenon largely attributed to the challenges of securing and maintaining banking partnerships within sectors deemed high-risk. The Federal Reserve's revised approach aims to alleviate these difficulties, focusing instead on concrete financial risks.
In a Monday press release, the Federal Reserve Board detailed the revision of its supervisory materials. The initiative involves replacing all references to reputation or reputational risk with a focus on explicitly defined financial risks. The Board is actively collaborating with other federal bank regulatory agencies to establish consistent methodologies and comprehensive examiner training to ensure uniform application of the new guidelines across all supervised institutions.
Despite this change, the Federal Reserve Board emphasizes that banks remain fully accountable for adhering to all existing regulations and best practices in their risk management strategies. The elimination of "reputational risk" as a formal supervisory consideration does not diminish the importance of sound risk management within the banking sector itself. The Federal Reserve previously defined reputational risk as the potential for negative publicity, factual or otherwise, to result in customer loss, costly litigation, or reduced revenue streams.
However, critics argue that removing reputational risk from supervisory assessments could inadvertently obscure non-financial concerns, potentially leading to unintended consequences. This raises questions about the overall impact and effectiveness of the revised policy in mitigating risks within the evolving financial landscape. The long-term effects of this shift remain to be seen, but it undoubtedly represents a significant development in the relationship between the US financial regulatory system and the cryptocurrency industry.
