U.S. Banking Regulator Warns Wall Street on 'Debanking,' Claims Practices 'Unlawful'

The Office of the Comptroller of the Currency (OCC) has raised significant concerns regarding the practice of crypto debanking among nine major banks, including JPMorgan Chase and Bank of America, highlighting a potential resurgence of restrictive measures against the cryptocurrency sector. This supervisory review has sparked fears of a new wave of regulatory actions reminiscent of 'Operation Chokepoint 2.0.'

The Office of the Comptroller of the Currency (OCC) reported that nine major banks have effectively 'debanked' the cryptocurrency sector, denying it essential banking services. This action raises concerns about the regulatory environment for digital assets and could lead to further scrutiny from the Justice Department regarding the legality of such practices.

Fitch Ratings has issued a warning regarding the increasing exposure of U.S. banks to cryptocurrencies, highlighting the potential risks that could lead to downgrades in their credit ratings. This caution comes as banks explore digital assets for new revenue streams, which may also expose them to significant financial volatility.

On Tuesday, the price of Ethereum surged by 6.5%, reaching the significant $3,300 mark for the first time in nearly a month, marking a nearly 12% recovery over the past week. This increase has positioned Ethereum ahead of its competitors among the top ten cryptocurrencies by market capitalization. Analysts attribute this rise to heightened institutional interest, particularly from major players like BitMine, which holds a substantial collection of ETH.

XRP has entered a compression zone amid rising institutional demand and stagnant price action, with recent ETF inflows exceeding $756 million over 11 days, indicating a potential trend reversal. This situation has traders speculating on a significant price movement ahead.

Wall Street's leading Bitcoin bulls have adjusted their near-term price targets downward due to a decline in corporate demand and ETF outflows, indicating a slowdown in Bitcoin's market momentum. Despite this, long-term sentiment towards Bitcoin remains optimistic among some investors.

The Office of the Comptroller of the Currency (OCC) has confirmed that national banks in the U.S. are allowed to act as intermediaries in cryptocurrency transactions, specifically through riskless principal transactions. This clarification marks a significant regulatory step in the evolving landscape of digital assets.

The Office of the Comptroller of the Currency (OCC) has authorized national banks in the United States to engage in 'riskless principal transactions' involving cryptocurrencies, as outlined in Interpretive Letter 1188. This marks a significant regulatory shift, allowing banks to facilitate crypto transactions without assuming risk.