Crypto Group Warns: Fed May Leverage Banks to Target Crypto Firms

Crypto Group Warns Fed Could Use Banking Access to Squeeze Digital Asset Firms

A crypto industry group warned that the U.S. Federal Reserve could use its control over banking access to pressure or restrict digital asset firms, raising concerns about how financial regulators influence the sector’s ability to operate through the traditional banking system.

The warning centers on the Fed’s role in determining how banks connect to core payment and settlement infrastructure. For many crypto and fintech companies, relationships with banks are essential for routine functions such as holding customer funds, processing payroll, managing treasury operations, and facilitating deposits and withdrawals. If banking access is constrained—directly or indirectly—companies can struggle to provide basic services even if their underlying activities are lawful.

Why it matters: Banking access has become one of the most important practical choke points for the crypto industry in the U.S. Firms may be regulated at the federal or state level, but without reliable banking relationships they can face operational disruptions, higher compliance costs, and greater concentration risk if only a small number of banks are willing to serve the sector.

The broader context is an ongoing debate over how U.S. regulators should manage crypto-related risks while still allowing compliant businesses to participate in the financial system. In recent years, digital asset companies have argued that guidance and supervisory pressure on banks can function like a de facto restriction on crypto activity, even when regulators are not issuing formal bans.

The group’s message adds to that policy debate by emphasizing the Fed’s unique position in the financial system and urging scrutiny of how decisions about banking and payments access affect digital asset firms.