Fed's Crypto U-Turn? Senator Lummis Calls It "Lip Service"

Hang onto your hats, crypto fans! The Fed just yanked back its warning to banks about crypto risks, but don't pop the champagne yet. Senator Cynthia Lummis isn't buying it, calling it straight-up "lip service."

On a wild Friday, April 25, the Federal Reserve tossed out some restrictive guidance on banks holding crypto assets. But hold up—pro-crypto warrior Senator Lummis isn't convinced this is the start of a new era. She's calling out the Fed for what she sees as nothing more than a show on Bitcoin.

(1/5) Listen up, the Federal Reserve's move yesterday to pull back on crypto guidance? Total lip service. Here's the real deal:

Lummis is dropping truth bombs, saying the Fed's still blocking crypto-friendly banks from getting their hands on master accounts. You know, those VIP passes that let banks dive right into the Fed's payment system? This mess has even pushed crypto-friendly Custodia Bank to sue the Fed, screaming about those endless delays on their master account application.

Fed Didn't Drop Key Anti-Bitcoin Guidance: Lummis

But wait, there's more! Lummis is also pointing fingers at the Fed for still using "reputation risk" to keep banks in line. This shady tactic targets industries that might be legal but aren't exactly popular—like oil, weed, and yeah, crypto. It's making it a nightmare for these businesses to find a bank that'll take them.

This whole reputation risk thing? It's stirring up a storm. Lummis says the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have ditched it, but the Fed? Nope, they're still clinging to it.

And get this—Lummis is also slamming the Fed for not pulling the plug on the Policy Statement on Section 9(13). That's the one that labels Bitcoin and other crypto assets as "unsafe and unsound." Plus, she's not thrilled that the same crew behind the so-called "Operation Chokepoint 2.0" is still calling the shots at the Fed.

Operation Chokepoint? That's the buzzword for what some see as a sneaky anti-crypto bias, a whole bunch of moves by U.S. regulators under Biden that's making life tough for crypto companies. They're struggling to find banks to work with, forcing many to either scale back or go hunting for offshore banking buddies.