Biden Nominates Crypto Skeptic Saule Omarova to Lead OCC

President Joe Biden has nominated Saule Omarova to lead the Office of the Comptroller of the Currency (OCC).

Omarova is a Cornell University law professor whose critiques of digital assets bear resemblance to those of other government regulators. For instance, Gary Gensler, Chair of the Securities and Exchange Commission, believes the market is “rife with fraud, scams and abuse.” Additionally, OCC’s acting chief Michael Hsu said that crypto could potentially be as dangerous as the complex derivatives behind the 2008 financial crisis.

Nowhere has the reversal of the current administration on the crypto outlook been as marked as at the OCC. The independent bureau within the Department of the Treasury regulates national banks including JPMorgan Chase & Co. and Citigroup Inc. 

Previously, the OCC had granted limited bank charters to cryptocurrency firms, which smacked of unwanted competition for Wall Street players. The OCC was then led by Brian Brooks, who seemed determined to get regulations in order under his tenure. He later stepped down to become CEO of the U.S. arm of global cryptocurrency exchange Binance, only to resign a few months later. His policies were then reversed with the arrival of Hsu, a former Federal Reserve official.

Crypto’s defense

This stance taken by Hsu would likely be bolstered if Omarova is confirmed by the Senate. However, as she’s expected to face a tough confirmation battle in the Senate, the industry’s best defense against Omarova may turn out to be Republican policymakers.

Additionally, lawyers for crypto firms are making the case that regulators can’t impede innovation forever. From their perspective, the current state of affairs in Washington is merely a bump in the road. “It’s not going to be denied; It’s not even going to be meaningfully delayed,” said Timothy Spangler, a partner at Dechert LLP.

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