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OCC Head Brian Brooks Testifies Before Senate On Cryptocurrency and Stablecoins

The Acting Comptroller of the United States Office of the Comptroller of the Currency (OCC), Brian Brooks has testified before the US Senate Banking Committee about the growing use of cryptocurrencies and stablecoins in the country and the agency’s response to the rise of crypto.

According to the written testimony published by the Senate Banking Committee, Brooks noted that:

“Roughly 60 million Americans own some type of cryptocurrency, with a total market cap of nearly $430 billion. 33 These figures clearly illustrate that this payment mechanism is now firmly entrenched in the financial mainstream. Cryptocurrency has become a popular mechanism for sending and receiving payments for goods and services because transactions post in real time and provide convenience and security.”

On stablecoins, Brooks also revealed that its usage is on the rise in America and that and that “the rise in the use of stablecoins demonstrates consumers’ comfort with its use.”

The OCC’s Response To Growing Crypto and Stablecoin Usage

Brian Brooks noted that the OCC had responded in two major ways to the growing use of cryptocurrencies and stablecoins in the country.

The first of this direct response borders on the OCC’s directive to Banks under its regulatory oversight to begin offering cryptocurrency custody services, as Blockchain.news reported at the time. This move gave US banks, particularly those with a growing interest in cryptocurrencies to have direct legal involvement in providing crypto custody services to their customers.

Furthermore, the OCC boss noted that the regulatory body also expanded the scope of the banks to involve the holding of Stablecoin reserves as reported back in September. With this testimony prompted by the request from the Senate’s banking committee chair, Mike Crapo to the OCC to provide clarity to crypto payments and usage in the country.

Based on the dynamic nature of the blockchain and crypto ecosystem, Brooks concluded by saying:

“The agency continues to consider other issues relevant to cryptocurrency assets and distributed ledger technology including the application of the technology to support payments services conducted within the federal banking system.”

Democrats Critical of OCC's "Excessive Focus" on Crypto and Stablecoin Financial Services

Some Democrat members of the United States Congress led by Congresswoman Rashida Tlaib (D-MI) have criticized the Office of The Comptroller of the Currency (OCC) for having an “excessive focus” on cryptocurrencies and stablecoins, arguing crypto-related financial services move too far away from the core business of banking and finance.

In a letter signed by Tlaib as well as Congressmen Stephen Lynch (D-MA), Reps. Jesús G. “Chuy” García (D-IL), Deb Haaland (D-NM), Barbara Lee (D-CA), and Ayanna Pressley (D-MA), the lawmakers believe the OCC under Comptroller Brian Brooks is not sensitive enough with its policies as according to them, the OCC has not placed its priorities on what will help ease the effects of the COVID-19 pandemic.

“Arguably, the immediate needs of millions of at-risk individuals who have not yet received an economic stimulus check and/or cannot deposit their funds in a bank, deserve greater attention than an effort to increase access to financial services to the “banked community” via mobile phones,” the lawmakers wrote.

“Our concern regarding the OCC’s excessive focus on crypto assets and crypto-related financial services is shared by the American Bankers Association and other trade groups who have expressed similar reservations that such services move too far away from the core business of banking.”

As a means to get a better glimpse of the OCC’s position with respect to the access granted to US banks to hold stablecoin reserves, the lawmakers want Brooks to clarify if banks such as JPMorgan Chase, Wells Fargo, and others who holds Stablecoin reserves for their customers will be able to use such reserves when calculating the capital requirements of banks. The lawmakers want Brooks and the OCC to provide answers to this and seven other questions by December 10th.

The OCC boss recently testified before the Senate Banking Committee where he reiterated the agency’s commitment to allow crypto and stablecoins to thrive in the US provided the issuers comply with set standards.

President Trump Nominates Brian Brooks to Serve as US Comptroller of the Currency for A Five-Year Term

President Donald Trump announced his intent to nominate and appoint Brian. P. Brooks to be the Comptroller of the Currency for a term of five years.

Brooks is currently serving as the acting Comptroller of the Currency under the US Treasury. He previously served as chief legal officer of Coinbase cryptocurrency exchange before assuming his role at the Office of the Comptroller of the Currency (OCC), an independent bureau within the U.S Department of the Treasury.

Brooks took over the Comptroller’s office in May this year after Joseph Otting announced his decision to step down.

Brook would assume a five-year term after getting the approval of the US Senate. However, President Trump lost the recently concluded elections to Democratic party opponent Joe Biden. This means that Biden could nominate someone else to the position if the Senate does not confirm Brooks’ position before January 20th of next year. It remains unclear whether the Senate Democrats on the committee would vote for Brooks.

Earlier this month, a group of Democratic lawmakers sent a strongly worded letter to Brooks in which the political authorities harshly criticized him and his office for focusing too much on cryptocurrencies. They said he did not spend enough time addressing minority banking matters and improving financial inclusion, especially considering this difficult time when the COVID-19 pandemic has adversely affected the global economy.

It is still unknown whether it will be the case, but the Democratic senators may wish to let President-elect Biden nominate his own candidate of choice to the Comptroller of the Currency position, instead of letting President Trump confirm another regulator.

Brooks’ Commitment to Help Banks Embrace Crypto

Since assuming office as a Comptroller of the Currency, Brooks has worked on several policy initiatives on virtual assets. In late July, his office opened the door for national saving banks and federal saving associations to hold crypto assets on behalf of their customers. This announcement came after Brooks led his OCC office to seek public input on the digital activities of financial institutions, including actions related to blockchain and cryptocurrencies. The initiative marked a significant wave of change for the US banking sector’s relationship with the nascent crypto ecosystem.

Brooks has proved himself to be an individualist in his role at the OCC office. He has worked to demystify fears surrounding cryptocurrencies by helping set up systems that now enable banks to adopt cryptocurrencies safely.

The OCC is Focused on "Not Killing" Bitcoin and Crypto says Acting Comptroller Brian Brooks

The newly nominated Comptroller of the United States Office of the Comptroller of the Currency (OCC), Brian Brooks has affirmed that the agency is not planning any ban or to place any stringent regulation on Bitcoin and cryptocurrencies.

The OCC Has Good Plans For Bitcoin

Asked by Melissa Lee on CNBC Squawk Box, the former Chief Legal Officer at Coinbase cryptocurrency exchange quelled rumors making the rounds about regulation or a ban on Bitcoin and cryptocurrencies. In response Brooks said;

“We’re very focused on getting this right. We are very focused on not killing this, and it is equally important that we develop the networks behind #bitcoin and other cryptos as it is we prevent money laundering and terrorism financing.”

Brooks noted that the position of the agency is to embrace a balanced approach so that both regulators and investors in the space will be carried along. The OCC boss also responded to a query seeking to know if more regulations covering the cryptospace will be rolled out by the end of the Trump administration. Brooks responded by saying that there is going to be a lot of positive news coming from the White House in the coming days and much of it will border around banking, blockchain, and digital currencies.

“So, believe me, there’s gonna be lots of positive messages coming out.”

The OCC’s Bullish Crypto Approach Taking Heat From Lawmakers

The freedom to develop that the Office of the Comptroller of the Currency is giving to cryptocurrencies, particularly Bitcoin and stablecoins, is not passing without a rebuff.

According to a Blockchain.news report back in November, some Democrat members of the United States Congress led by Congresswoman Rashida Tlaib (D-MI) criticized the Office of The Comptroller of the Currency (OCC) for having an “excessive focus” on cryptocurrencies and stablecoins, arguing crypto-related financial services move too far away from the core business of banking and finance.

Nonetheless, the OCC according to Brooks is aware of the risks associated with digital assets and is handling regulations in the space by being “honest” about that fact.

OCC’s Brian Brooks Proposes ‘Country Coin’ Crypto Scheme to Close Global Wealth Gap

Brian Brooks has been making waves at the Office of the Comptroller of the Currency (OCC) since joining the regulator earlier this year—but his latest proposal called ‘country coin’ appears to have the potential to change the world and could be a serious solution to closing the wealth gap between developed and developing nations.

Brooks, who is a former Coinbase legal head and is now the United States Acting Comptroller of the Currency, has made significant strides in the digital space, including granting more banking charters to fintechs, startups, and supporting cryptocurrency innovation.

Brooks’ conceived ‘country coin’ would essentially be a government-backed cryptocurrency reward system to promote education and economic growth worldwide. In an interview with Fortune on Dec.16, the acting Comptroller explained that as higher literacy rates correlate to a higher gross domestic product, then by offering incentives to people to continue their schooling could boost productivity, individual well-being, and societal prosperity.

In the scheme, a person would be rewarded by their state with country coins for completing educational courses and passing exams. The coins would be a type of cryptocurrency and represent a claim on a trust set up by a world government. Country coins would entitle recipients to future payouts that represent a share of rising tax revenue which would be generated by the increased GDP of the state as the education level pushes it higher.

The concept seems simple but could have a huge impact on closing the divide between developed and developing nations. As citizens gain more education—nations, country coin–earning students, and investors get richer together. The cryptocurrency proposal ensures everyone benefits from the system.

Brooks said:

“This is a way of increasing equity and increasing growth without raising taxes and without pitting the rich against the poor.”

Brooks pointed to developing nations like Afghanistan and countries in Southeast Asia and Latin America as being among the regions where the ‘country coin’ crypto scheme could have the largest impact. He asserted:

“There’s no technological reason this couldn’t happen right away.”

Brooks was not shy in his proposal and drew comparisons on the potential impact of his team’s work with that of Noble Prize winner Muhammad Yunus, who won the award for his pioneering work on alleviating poverty through microloan financing

Brooks said:

“I’m telling you this should be the next Nobel Prize. It’s a big idea.”

Brian Brooks and Crypto Regulation

Brian Brook who is the former Chief Legal Officer at Coinbase cryptocurrency exchange first earned the praise of the private sector for his regulatory approach with the OCC which included clarifying that banks are permitted to hold deposits backing stablecoins.

Some Democrat members of the US Congress led by Congresswoman Rashida Tlaib (D-MI) have criticized Brooks for having an “excessive focus” on cryptocurrencies and stablecoins, arguing crypto-related financial services move too far away from the core business of banking and finance.

Brooks recently quelled rumors making the rounds about an incoming regulation or a ban on Bitcoin and cryptocurrencies.

Speaking to CNBC on Dec. 5, Brook said:

“We’re very focused on getting this right. We are very focused on not killing this, and it is equally important that we develop the networks behind #bitcoin and other cryptos to prevent money laundering and terrorism financing.”

Brooks noted that the position of the agency is to embrace a balanced approach so that both regulators and investors in the space will be carried along.

OCC Says US Banks Can Use Blockchains and Stablecoins in Bank Payments

An interpretative letter issued by the Office of the Comptroller of the Currency (OCC) could accelerate the adoption of cryptocurrency and blockchain-based payments in the United States.

According to the OCC on Monday, regulated banks in the United States can leverage stablecoins as well as participate as nodes on blockchain networks to make, store and validate payments.

In the federal banking regulator’s interpretive letter, the OCC confirmed that federally regulated banks could participate in blockchain networks known as “independent node verification networks (INVNs)” and use stablecoins.

However, any banks that do participate as a validator on an INVN must ensure they are aware of the operational, compliance, or fraud risks when doing so. Per the interpretative letter:

“A national bank or federal savings association may validate, store, and record payments transactions by serving as a node on an INVN [independent node verification network]. Likewise, a bank may use INVNs and related stablecoins to carry out other permissible payment activities.”

The OCC said INVNs and DLT technology “may be more resilient than other payment networks” due to a large number of validator nodes needed to verify transactions, creating a more tamperproof and transparent network.

Acting Comptroller of the Currency Brian Brooks, a former Coinbase executive, said in a press release that the move is about leveraging the cryptocurrency industry to keep pace, as he argues the United States has too long relied on the private sector for innovation. Brooks said:

“While governments in other countries have built real-time payments systems, the United States has relied on our innovation sector to deliver real-time payments technologies.”

On the announcement by the OCC, Jeremy Allaire, co-founder and CEO of Circle, tweeted, “This is a huge win for crypto and stablecoins.” Circle is the operator of the USDC stablecoin, pegged 1:1 with the dollar.

Allaire added:

“We are on a path towards all major economic activity being executed on-chain. It is tremendous to see such forward thinking support from the largest regulator of national banks in the United States.”

Brian Brooks Comptroller of the Cryptocurrency

A former Coinbase employee, acting Comptroller of the Currency Brian Brooks has overseen the publication of two other interpretative letters and has made a number of crypto-friendly moves.

Last month, Brooks publicly supported a letter by the President’s Working Group on Financial Markets that outlined how stablecoins should be regulated within the United States.

President Donald Trump has twice nominated Brooks to serve a full five-year term heading up the agency—however, Brooks still awaits confirmation in the Senate which appears unlikely to occur before President Trump leaves office later this month.

Former US Currency Comptroller Brian Brooks Hired as Next CEO of Binance.US

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Brian Brooks, a former top US banking regulator, will become the new Chief Executive Officer of Binance.US, the US affiliate of overseas cryptocurrency exchange Binance Holdings Limited.

In an interview, Brooks confirmed that he would begin the new job on May 1. The current CEO at Binance.US, Catherine Coley, will leave the firm by the start of May.

Brooks stated that his priorities at Binance.US would include reinforcing the crypto exchange’s commitment to regulatory compliance and making it a strong competitor to Coinbase. He said: “I wouldn’t have taken this job if I didn’t have a strong commitment from the board to lead a strong compliance program.”

Brooks, the former acting head of the Office of The Comptroller of The Currency under the Trump administration, is regarded as the “Crypto Comptroller” on social media, referring to his friendly attitude towards cryptocurrencies.

Under his leadership at the Office of The Comptroller of The Currency (OCC), Brooks introduced guidance clarifying that federally chartered banks can offer crypto custody services and use stablecoins to facilitate payment activities. The landmark announcement assisted in making it easier for traditional institutions to get into cryptocurrency.

Brooks worked at the OCC, a unit of the Treasury Department, as the acting head of comptroller for eight months from May 2020 to January 2021. Before he joined the OCC, he worked at Coinbase Global Inc. as the chief legal officer. In the past, he also worked as a general counsel of mortgage finance giant Fannie Mae.

Binance was founded in 2017 in China and later moved its offices to Malta and Japan. The overseas crypto exchange launched its US crypto branch, Binance.US, in 2019 to allow the firm to legally serve US customers. Binance exchange blocks US citizens to avoid facing regulatory difficulties with US regulators.

Why Crypto Firms Targeting Ex-Regulators

In recent months, cryptocurrency firms have hired many former government officials to not only seek mainstream acceptance but also to strengthen their compliance game. Such kinds of hires could assist crypto exchanges in navigating potential pitfalls in the emerging US regulatory framework for cryptocurrencies.

Last month, Coinbase hired Brett Redfearn, the former high-ranking director from the US Securities and Exchange Commission (SEC), to run its capital-markets division. Also last month, One River crypto asset management company hired Jay Clayton, the former SEC chairman, to join the academic and regulatory advisory council at the company.

Also last month, Binance main oversees crypto exchange hired Max Baucaus, the former Democratic senator from Montana and US ambassador to China, as a policy and government-relations adviser.

This month, BlockFi crypto company hired Christopher Giancarlo, the former Commodity Futures Trading Commission chairman, to join the company’s board of directors.

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Image source: https://www.wsj.com/articles/cryptocurrency-giant-binance-hires-former-top-bank-regulator-11618912800

Binance.US CEO Brian Brooks Steps Down, Cites Strategic Differences with Colleagues

Brian Brooks announced in his Twitter account that he has resigned from Binance.US CEO just after taking the managing position four months ago.

On Friday, August 6, Brian Brooks tweeted that he resigned because of “differences over the strategic direction” between him and his colleagues at Binance Group:

“Letting you all know that I have resigned as CEO of Binance-US…. I wish my former colleagues much success. Exciting new things to come!”

Binance CEO Changpeng Zhao (Binance.US chairman) talked about the development and said he is “confident in Binance.US’ business and its commitment to serve its customers.” Zhao stated that Brook’s departure would not affect Binance.US customers in any way:

“Brian’s work for Binance.US has been invaluable, and we hope he will continue to be an integral part of the crypto industry’s growth, advocating for regulations that move our industry forward. We wish him the very best in his future endeavours.”

Zhao did not say why Brooks left the group, and even Brooks did not explain the specific reason. So far, Binace.US has not elaborated on any successor or an interim expert to replace Brooks.

Binance Facing Increasing Scrutiny

Brooks’ departure, together with the departure of Ricardo Da Ros, director of Binance Brazil, raise more questions as regulators crack down on Binance, the world’s largest crypto exchange in the world, has intensified.

On Wednesday, July 14, Mr. Ricardo Da Ros announced his resignation as a director of Binance Brazil after serving the position for six months at the firm. Da Ros stated that he could not accomplish what he wanted within the first six months, so he departed from the company.

Brooks and Da Ros have resigned when regulators in the UK, Thailand, Italy, Japan, Germany, and Hong Kong have cracked down on Binance because of worries over investor protection. Financial regulators worldwide have raised concerns that the boom in crypto assets is aiding money laundering and increasing systemic risks.

Binance.US Appoints Joshua Sroge As Interim CEO Following Brian Brooks’ Departure

Binance.US, the American division of the world’s largest cryptocurrency exchange in terms of daily trading volume, has appointed Joshua Sroge, the company’s CFO, as the interim CEO.

The appointment comes after the former Binance.US CEO, Brian Books, was abruptly reassigned from his role.

On August 6, Mr. Brooks, the former acting head of the Office of The Comptroller of The Currency, departed from his CEO role at Binance.US after just four months of taking the job.

Earlier this month, Mr. Brooks, the former Chief Legal Officer at Coinbase crypto exchange, tweeted about his decision to step down as Binance.US CEO, citing “differences over the strategic direction” with his colleagues at the company and wished them much success at work.

Sroge joined Binance.US after five years as CFO at Firestone, a management consultancy firm that offers financial and strategic expertise to businesses. Before working at Firestone, Sroge worked as the Chief Accounting Officer at Swiss cryptocurrency firm Shapeshift, which grew its employees from 15 to 115 during his tenure.

Sroge, the longest-serving employee at Binance.US, took over the role of CFO at the firm in January 2020. The board has picked him to lead the company until a permanent CEO is named.

Taming the Crypto Giant

Mr. Brooks’ resignation came when regulators across the world have been scrutinising Binance’s operations.

Binance is the world’s largest crypto exchange with twenty-four-hour trading volumes of approximately $19.3 billion, dwarfing its competitors.

Despite its success, Binance has come under increasing regulatory scrutiny in recent months as global regulators in nations such as Malaysia, Thailand, Japan, the UK, the US and others have initiated regulatory investigations or banned its operations altogether.

Last month, Italy joined the long list of nations warning Binance about its lack of regulation. In late June, the U.K’s financial regulator, the Financial Conduct Authority (FCA), banned Binance from undertaking any regulated activities.

In the United States, Binance, which hosts about 13.5 million active users, has been facing investigation by the CFTC (Commodity Futures Trading Commission) concerning whether its users’ trade derivatives despite CFTC regulations. In May, the Internal Revenue Service and the Department of Justice started investigating Binance for money laundering.

Voyager Digital Taps Former OCC Boss Brian Brooks as Director

Voyager Digital, one of the publicly traded cryptocurrency platforms in the United States, has tapped the services of Brian Brooks, the current Chief Executive Officer of Bitfury, as one of its non-Executive Directors.

The appointment was announced on Monday, and per the company, Brooks’ works start immediately.

“On behalf of the Board, I welcome Brian to the Board as an independent, non-executive Director.” said Philip Eytan, Chairman of Voyager Digital, “Brian’s extensive background as an executive at major crypto companies and as the leader of important government regulatory initiatives in the crypto space will help propel the growth of digital assets and Voyager’s business.”

Brooks’ appointment was informed by the wealth of experience he has gathered in his professional career while serving as the Comptroller of the Currency under former President Donald Trump’s administration. Following his departure from the OCC, Brooks has taken on roles in the digital currency ecosystem, and this, to an extent, has broadened his perspective the more in the space.

Brooks is known for his proactiveness in helping to advance the growth of the nascent digital currency ecosystem. Under his reign at the OCC, the regulator permitted Federally Chartered Banks to keep custody of stablecoins, one of the first and crucial gestures of openness to the crypto ecosystem from a Federal Agency.

The recognition of Brooks as a crypto advocate is duly recognized across the entire digital currency ecosystem as he represented Bitfury in the U.S. House Committee on Financial Services to discuss cryptocurrencies. The ascension of Brian Brooks mimics that of Jay Clayton, the former Chairman of Security and Exchange Commission. He was appointed earlier in the year as an Advisor with One River Digital Asset Management company.

With the appointment of Brooks and Clayton making headlines, it is becoming evident that digital currency platforms are prioritizing the integration of former regulators in preparation for the future of the ecosystem.