Politico | Zachary Warmbrodt | Jan 3, 2023
Picture: Unsplash/Rythik
This was imagined to be fintech’s massive 12 months in Washington [but ] the sequence of scandals that emerged in late 2022 are derailing that momentum, placing the once-ascendant challengers to conventional banks on protection.
- Crypto winter continues — People are getting unhealthy information on daily basis concerning the integrity of the cryptocurrency trade, with executives now overtly accusing one another of wrongdoing following the FTX fraud scandal and market crash. Some lawmakers who purchased into crypto’s potential are beginning to voice mea culpas. Lengthy-time skeptics are emboldened.
- FTX founder Sam Bankman-Fried’s anticipated not-guilty plea to sweeping legal prices. Anticipate extra damning revelations as the federal government makes its case towards Bankman-Fried and different FTX and Alameda Analysis executives who have been as soon as the digital forex world’s main ambassadors in Washington.
See: Will International Regulation See Bitcoin Surge in 2023?
- Federal prosecutors revealed over the vacation break that bankrupt digital asset lender Voyager Digital could be the focus of a CFIUS assessment — an interagency course of designed to police international funding in U.S. firms. Why does it matter? Binance.US — the home affiliate of the behemoth worldwide crypto alternate Binance — is making a bid to amass Voyager. It underscores how Binance is primed for higher Washington scrutiny for a number of causes.
- The SBA in 2022 moved to let fintechs tackle a much bigger function in its flagship non-emergency lending program. However these corporations are going through new investigations and political backlash after the Home coronavirus subcommittee outlined in December how a lot of the businesses uncovered the Paycheck Safety Program to fraud.
- Regulators are below stress — Whereas all of this casts a pall over fintech on Capitol Hill, it extra importantly signifies that Biden appointees at key regulatory businesses have a brand new mandate to crack down. Treasury in a November report referred to as for higher oversight of fintechs within the shopper area.
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