Federal Reserve stops using "reputational risk" to target and debank crypto firms.

From Cointelegraph
June 24, 2025 12:41 AM:

The US Federal Reserve has stopped using “reputational risk” to target and debank crypto firms, impacting more than 30 tech and crypto companies. The board is reviewing supervisory materials and training examiners to ensure consistent implementation across banks under its oversight, promoting best practices with other federal regulatory agencies.

Despite the change, the Federal Reserve still expects banks to maintain strong risk management practices in compliance with all laws and regulations. The change is not meant to affect how banks use reputational risk in their own risk management practices. Reputational risk is defined as potential negative publicity affecting an institution’s business practices.

US Senator Cynthia Lummis celebrated the decision to remove reputation risk policies, calling it a win for American Bitcoin and digital asset businesses. Rob Nichols from the American Bankers Association also praised the decision, believing it will make the supervisory process more transparent and consistent. Critics, however, fear eliminating reputational risk could lead to non-financial issues impacting bank stability.

Regulators in the US are easing crypto-related restrictions, with the Office of the Comptroller of the Currency allowing banks to trade crypto on behalf of customers and outsource some activities. The Federal Deposit Insurance Corporation confirmed institutions under its oversight, including banks, can engage in crypto-related activities without prior approval. Other regulators are also making moves to allow more crypto activities.

Read more at Cointelegraph: Federal Reserve Cuts Reputational Risk Category In Win For Crypto