What does Biden’s pick of Cornell’s crypto critic Omarova as bank watchdog say about US attitude towards digital tokens?

The White House nominated Saule Omarova last week to lead the Office of the Comptroller of the Currency (OCC)

The Cornell University law professor’s critiques of digital tokens fit right in with statements that have recently emerged from government watchdogs

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Tokens representing the cryptocurrencies Ripple, Bitcoin, Litecoin and Ethereum on February 01, 2018 in Paris. Photo: Getty Images

Published: 11:15am, 29 Sep 2021

President Joe Biden may have just dashed any remaining hopes that Washington would warm to cryptocurrencies under his watch.

The White House nominated Saule Omarova last week to lead the Office of the Comptroller of the Currency (OCC), all but confirming that US financial regulators will be void of any crypto allies for at least the next three years.

The Cornell University law professor’s critiques of digital tokens fit right in with statements that have recently emerged from government watchdogs. Securities and Exchange Commission (SEC) Chair Gary Gensler says the market is “rife with fraud, scams and abuse.” And Michael Hsu, who has been filling in as the OCC’s acting chief, said September 21 that virtual coins might be as dangerous as the complex derivatives that ignited the 2008 financial crisis.

“It took several years for regulators to wake up, but it’s like a bulldozer,” said Jim Angel, an associate professor specializing in market structure at Georgetown University. “It’s slow, it’s steady and it will grind down anything in its path.”

Saule Omarova, a Cornell Law School professor, has been nominated to lead the Office of the Comptroller of the Currency. Photo: Cornell Law School/TNS

While the outlook for crypto has changed markedly since the end of the Trump administration, the reversal has been particularly sharp at the OCC, which regulates national banks including JPMorgan Chase & Co. and Citigroup.