Bitcoin-Friendly Senator Warned Against the Trap the FED Applies on Cryptocurrencies!

At the Congress, one of the main representatives of cryptocurrencies, US Senator Cynthia Lummis, sharply criticized the Fed’s recent move to pull back its fundamental guidelines regarding cryptocurrencies, describing it as a “hollow speech” that does not bring real progress to the digital asset industry.

On Thursday, the FED had canceled a series of Biden-era letters and a joint statement that deterred banks from engaging with crypto customers. The decision was welcomed by some in the crypto community as a sign of the changing regulatory environment under the Trump administration. However, Lummis warned that this gesture was lacking in substance and did not address the broader challenges that the sector still faces.

In a statement on X, Lummis said, “The Fed’s actions to pull back its crypto guidance yesterday are just a facade” and added, “The Fed has suffocated companies in the sector and harmed American interests by stifling innovation and shutting down businesses. This struggle is not over yet.”

Despite stepping back from previous guidance, the FED has refrained from retracting an important 2023 letter that requires state-chartered banks to obtain approval before offering crypto services, a move characterized by Lummis and industry experts as maintaining regulatory uncertainty.

Lummis said, “I will continue to hold the FED accountable until the digital asset industry receives more than a life jacket.”

Lummis also claimed that the Fed continues to use the so-called “reputational risk” to justify denying access to banking services, asserting that this tactic is used by critics to marginalize legal but controversial industries, including cryptocurrencies, without a clear financial rationale.