{"id":9389,"date":"2025-03-06T19:16:52","date_gmt":"2025-03-06T18:16:52","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=9389"},"modified":"2025-03-06T19:16:52","modified_gmt":"2025-03-06T18:16:52","slug":"new-gop-legislation-seeks-to-protect-crypto-firms-from-debanking-practices","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/06\/new-gop-legislation-seeks-to-protect-crypto-firms-from-debanking-practices\/","title":{"rendered":"New GOP Legislation Seeks to Protect Crypto Firms from Debanking Practices"},"content":{"rendered":"\n
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South Carolina Senator Tim Scott, who chairs the US Senate Banking Committee, intends to propose a legislative measure on March 6 aimed at ceasing regulatory scrutiny of client reputational threats towards financial institutions, thereby leading to the termination of a biased practice known as \u201cdebanking,\u201d as reported<\/a> by The Wall Street Journal.<\/p>\n

Debanking refers to a situation where banks may opt not to transact with customers that present \u201creputational threats.\u201d The Federal Reserve characterizes<\/a> reputational risk as \u201cthe possibility that adverse publicity concerning an institution\u2019s operational practices, whether or not accurate, may lead to a reduction in the customer base, expensive lawsuits, or revenue drops.\u201d<\/p>\n

At least 11 Republican representatives are reportedly backing Scott\u2019s measure, while several banking sector organizations anticipate supporting it, The Wall Street Journal noted. Among these entities is the Bank Policy Institute<\/a>, which identifies<\/a> itself as a nonpartisan organization representing America\u2019s leading banks. JPMorgan Chase<\/a>, the largest banking institution in the United States, has also expressed its support for the legislation.<\/p>\n