Today in crypto: A US regulator found major US banks debanked the crypto sector, Strategy responded to MSCI’s plan to exclude crypto treasuries from its indexes and Japan is preparing to move crypto regulation under securities law.
Crypto among sectors ‘debanked’ by major banks: OCC
The nine largest US banks restricted financial services to politically contentious industries, including cryptocurrency, between 2020 and 2023, the Office of the Comptroller of the Currency (OCC) said in preliminary findings on Wednesday.
The banks implemented policies restricting access to banking or requiring escalated reviews and approvals before giving financial services to certain customers, the OCC said.
It added that banks’ actions toward crypto included restrictions on “issuers, exchanges, or administrators, often attributed to financial crime considerations.”
“It is unfortunate that the nation’s largest banks thought these harmful debanking policies were an appropriate use of their government-granted charter and market power,” said Comptroller of the Currency Jonathan Gould.
The OCC named JPMorgan Chase, Bank of America, Citibank, Wells Fargo, US Bank, Capital One, PNC Bank, TD Bank and BMO Bank. The regulator added it’s continuing its investigation and could refer its findings to the Justice Department.
Strategy responds to MSCI letter, makes case for index inclusion
Strategy, the largest Bitcoin treasury company, submitted feedback to index company MSCI on Wednesday about the proposed policy change that would exclude digital asset treasury companies holding 50% or more in crypto on their balance sheets from stock market index inclusion.
Digital asset treasury companies are operating companies that can actively adjust their businesses, according to the letter, which cited Strategy’s Bitcoin-backed credit instruments as an example.
The proposed policy change would bias the MSCI against crypto as an asset class, instead of the index company acting as a neutral arbiter, the letter said.
The MSCI does not exclude other types of businesses that invest in a single asset class, including real estate investment trusts (REITs), oil companies and media portfolios, according to Strategy. The letter said:
“Many financial institutions primarily hold certain types of assets and then package and sell derivatives backed by those assets, like residential mortgage-backed securities.”
The letter also said implementing the change “undermines” US President Donald Trump’s goal of making the United States the global leader in crypto. However, critics argue that including crypto treasury companies in global indexes poses several risks.
Japan plans major shift as crypto moves from payments to securities law
Japan’s financial regulators are preparing to move crypto asset oversight out of the country’s payments regime and into a framework designed for investment and securities markets.
The Financial Services Agency (FSA) on Wednesday released a comprehensive report from the Financial System Council’s Working Group on the regulatory status of cryptocurrencies across multiple sectors.
The document outlines a plan to shift the legal basis for crypto regulation from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), which is the primary law regulating securities markets, issuance, trading and disclosures.
“Crypto assets are increasingly being used as investment targets both domestically and internationally,” the report noted, underscoring the need to protect users by providing regulation that treats crypto as a financial product.
One of the core changes brought by bringing crypto under FIEA regulatory scope is strengthening data disclosure requirements for initial exchange offerings (IEOs), or token sales managed by crypto exchanges.
“Crypto transactions conducted by users are similar to securities transactions, and may involve the sale of new crypto assets or the buying and selling already in circulation,” the document reads, highlighting the importance of timely information during IEO sales.
