Ark Invest CEO Cathie Wood has concurred with Congressman Tom Emmer’s letter to the FDIC chair, which accused the authority of weaponizing instability in the banking sector to uproot crypto from the US.
In a long Twitter thread on Thursday, March 16, Cathie Wood said that regulators were using “crypto as a scapegoat for their own lapses in oversight of traditional banking,” and crypto had nothing to do with recent baking crises.
If you are correct, Congressman, then the FDIC and others will prevent the US from participating in the most important phase of the internet revolution. Like you, I believe regulators are using crypto as a scapegoat for their own lapses in oversight of traditional banking. https://t.co/UDh3bwB2pB
— Cathie Wood (@CathieDWood) March 16, 2023
Tom Emmer’s Letter to FDIC Chair
Tom Emmer, Republican Congressman for Minnesota, wrote a letter to the Chairman of the Federal Deposit Insurance Corporation (FDIC), Mark Gruenberg, on Wednesday, March 15, expressing his concerns about the collapse of crypto-centred banks like Silvergate, SVB, and Signature Bank.
Today, I sent a letter to FDIC Chairman Gruenberg regarding reports that the FDIC is weaponizing recent instability in the banking sector to purge legal crypto activity from the U.S. 👇 pic.twitter.com/fDmaA0XGWv
— Tom Emmer (@GOPMajorityWhip) March 15, 2023
He asked the FDIC if had instructed banks under its supervision not to provide banking services to crypto firms if it explicitly or implicitly told banks they would face harsher supervision if they took on new crypto clients.
He said that the recent bank closure appeared to be the result of unprecedented interest rate hikes and demanded to know what guidance the FDIC provided to financial institutions to help manage the risk of rising rates.
According to Tom Emmer, federal financial regulators have weaponized their authorities to purge crypto from the United States. Citing Barney Franks’ comments, he said that many in the industry had highlighted the targeted nature of recent regulatory actions. He wrote:
“If this is the case, these actions to weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes, are deeply inappropriate and could lead to broader financial instability.”
Cathie Wood Agrees With Tom Emmer
According to Cathie Wood, CEO of investment management firm Ark Invest, it was Fed policies that led to the banking crises. Regulators are now hiding behind crypto to mask holes in their oversight of the traditional banking sector. She wrote:
“Crypto did not force SVB and Signature into bankruptcy. In my view, Fed policy was the primary culprit. Because of a VC funding drought and higher yields on money market funds, deposits left the US banking system.”
She opined that, in reality, the decentralized crypto assets ecosystem would have prevented this debacle. These targeted regulatory actions would prevent the US from participating in the most important phase of the internet revolution. Cathie concluded:
“In our view, crypto is a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. Made the scapegoat for policy mistakes, crypto will move offshore, depriving the US of one of the most important innovations in history.”