BlockBeats News, March 25th, David Sacks, the U.S. cryptocurrency and AI chief, stated that the Federal Deposit Insurance Corporation (FDIC) is following in the footsteps of the Office of the Comptroller of the Currency (OCC) by eliminating "reputational risk" as a factor in bank regulation, calling it a great victory for cryptocurrency.
"Reputational risk" sounds good in theory, but its definition is "the risk that negative publicity regarding a financial institution's business practices, whether true or not, will lead to a reduced customer base, expensive litigation, or reduced revenue potential." In practice, this vague and subjective standard has been used to justify the denial of banking services to legitimate cryptocurrency businesses through "Operation Choke Point 2.0." Banking standards should be objective and quantifiable, rather than based on potentially untrue narratives.
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