Ex-SEC Enforcement Veteran John Reed Cautions Fintech Experts about Stringent Regulations by FED, FDIC, and OCC

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The implosion of FTX and Alameda Research late last year triggered a myriad of regulatory onslaught on the cryptocurrency industry in the United States. The Biden administration has used all resources at its disposal to ensure the United States dollar is not dethroned from its position as a global reserve currency by the mainstream adoption of digital assets, which are not issued and controlled by the Fed.

In a bid to ensure the US dollar retains its relevance around the world, the Biden administration has undertaken several initiatives through the digitization of its payment infrastructure.

Legal Experts Warn Web3 Firms on Widespread Regulatory Onslaught 

According to a former SEC enforcement officer who currently works as a senior lecturer at Duke University School of Law, John Reed Stark, the banking sector will have more regulatory weight if they intend to adopt digital assets or work with Web3 firms. Precisely, Stark argued that any bank intending to do business with stablecoins issuing fintech like PayPal needs to proceed with extra caution.

“For fintech professionals in particular, take heed. U.S. Banking regulators like the Fed, FDIC, and OCC have officially kick-started a range of burdensome, weighty, and powerful regulatory initiatives pertaining to digital assets, and crypto is not their only target,” Stark noted. 

Notably, Stark based his arguments on the recent Federal Reserve announcement relating to how banks in the United States interact with the crypto sector.