"Given the risks posed by cryptocurrencies to banks and their customers, we request that you withdraw OCC Interpretive Letters 1170, 1172, 1174, and 1179 and coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation to develop a comprehensive approach that adequately protects consumers and the safety and soundness of the banking system," the letter said.

The senators also asked a series of questions about how many banks have been approved to engage in crypto activities, what kinds of services those banks provide, the dollar volumes the banks hold tied to crypto and whether any of these banks are involved in other crypto-related activities such as trading derivatives.

Cryptocurrencies are highly volatile assets that offer few, if any, protections to retail investors. The crypto market has plunged over the last several months, astonishingly erasing about $2 trillion in value since its high in November 2021 and triggering the collapse of several major crypto lenders and firms.(6) In May 2022, two of the three largest stablecoins – cryptocurrencies intended to maintain a set value through a peg to another cryptocurrency, fiat currency or other exchange-traded commodities – failed to maintain their pegs, with the collapse of Terra, an algorithmic stablecoin that was supposed to be pegged to the U.S. dollar, “end[ing] with a bank run that made $40 billion of tokens virtually worthless.”(7) And in July 2022, crypto “banks” Celsius and Voyager and crypto hedge fund Three Arrows Capital filed for bankruptcy protection.(8) While you declared that “there has been no contagion from cryptocurrencies to traditional banking and finance” during this recent market turmoil,*9) it is clear that stronger protections are necessary to mitigate crypto’s risks to the financial system and consumers.

Elizabeth Warren Richard J. Durbin Sheldon Whitehouse Bernard Sanders