Regulation by enforcement, a fast and economical substitute for thorough rulemaking, is widely regarded as some of the U.S. executive agencies’ preeminent approach to crypto regulation. It could be summed up as letting crypto firms explore the boundaries of what is permissible by themselves and then punishing industry participants in case their exploratory actions come to look like a transgression. Others will take heed and learn from the explorer’s negative experience.
While it is the United States Securities and Exchange Commission that gets accused of over-reliance on regulation by enforcement most frequently, other federal agencies do that as well. Last week, the U.S. Office of the Comptroller of the Currency, or OCC, announced cease and desist proceedings against Anchorage Digital, the nation’s first crypto custody firm to be awarded a national bank charter.
The reason is the crypto bank’s alleged failure to implement a compliance program in line with the Bank Secrecy Act and Anti-Money Laundering standards. As Anchorage Digital races to remedy the shortcomings that the OCC pointed out, other industry players hoping to secure a bank charter will be watching closely.
Crypto to the Earth
One of the most contentious policy debates around blockchain and cryptocurrency currently unfolds over the industry’s sustainability and environmental effects. From the European Union to individual U.S. states, regulators are continuously on the offensive on this front. The latest push came from a group of U.S. representatives who called for the Environmental Protection…