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OCC Comptroller: Crypto Companies ‘Don’t Know What They Want to Be When They Grow Up’
Michael Hsu joined “First Mover” to discuss why crypto companies need to provide more clarity on what they offer and be in less of a rush to expand without a “strong foundation.”
Updated Oct 13, 2022, 7:08 p.m. Published Oct 13, 2022, 7:08 p.m.
Acting Comptroller of the Currency (OCC) Michael Hsu says the lack of focus at some crypto companies with plans to expand is hindering agencies like his from establishing regulatory standards.
“Part of this confusion is because there are parts of the crypto industry that don't know what they want to be when they grow up,” Hsu said during an appearance on CoinDesk TV’s “First Mover” on Thursday. “They [crypto companies] want to be a little bit of everything to everyone. And at some point you have to decide.”
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He noted the failures earlier this year of crypto lender Celsius Network and crypto hedge fund Three Arrows Capital, both now in bankruptcy court, as examples of the “foundational issues” the crypto industry needs to address.
Read more: Crypto Doesn't Need More Guidance, SEC Chair Gensler Says
He added that because of this “unclarity,” regulators cannot be expected to set clear crypto oversight guidelines. The industry must lay out how the products being offered, such as custody accounts, are operating.
Hsu is concerned about the expansion plans of many in the crypto sector. "If you don't have strong foundations, it doesn't matter what your charter [is] ... [the company is] not going to scale sustainably. And I know that's a goal. If you want something to scale, play the long game. You [have] got to have some strong foundations."
As for his federal banking agency, he is open to discussions on “controlled and disciplined” ways of enabling growth for crypto companies.
“If there's ways to control and limit the manner in which growth takes place, we're all ears. What we are allergic to is, ‘Give me a license and let me do whatever I want.’ That's not something that's safe and sound,” Hsu said.
Read more: SEC's Gensler Holds Firm That Existing Laws Make Sense for Crypto
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