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FDIC Chairman Martin Gruenberg steps down after report on toxic workplace culture

The report revealed serious problems with management and working conditions at the agency, which had a negative impact on employee morale and the operation of the institution.

Date: 2024-05-21 Author: Łukasz Michałek
FDIC Chairman Martin Gruenberg steps down after report on toxic workplace culture

Martin Gruenberg, chairman of the U.S. Federal Deposit Insurance Corporation (FDIC), is stepping down after an investigation that uncovered a toxic work culture at the banking regulator.

According to a Reuters report, Gruenberg, who has headed the FDIC since August 2005, made the announcement on May 20, expressing his willingness to relinquish his duties once a successor is approved.

The third-party investigation focused on allegations of sexual harassment and other forms of interpersonal misconduct at the FDIC, as well as management’s response to the incidents.

Gruenberg then testified before Congress on May 15, facing criticism from both Republicans and Democrats, who expressed shock and disappointment at widespread allegations of sexual harassment and mistreatment of subordinates at the FDIC.

The lawmakers called on Martin Gruenberg to resign

Lawmakers, including Senate Banking Chairman Sherrod Brown, have called on Gruenberg to resign, and the White House has confirmed its intention to nominate a new candidate for FDIC chairman.

Senator Elizabeth Warren, however, has expressed confidence in Gruenberg’s ability to bring about change at the agency, drawing criticism from industry veterans.

“It’s disgraceful how Elizabeth Warren circled the wagons to keep one of her disgraced puppets in place. I look forward to the debates,” commented digital asset industry lawyer John Deaton.

The crypto community celebrated Gruenberg’s decision to step down, with people such as Nic Carter, a partner at Castle Island Ventures, calling it “the best day ever.”

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Gruenberg’s role in facilitating the so-called “Operation Choke Point 2.0 ” – an effort by the FDIC to discourage banks from providing services to cryptocurrency companies – has been met with criticism.

In October 2022. Gruenberg gave a speech comparing crypto assets with risky financial innovations that played a role in the 2008 financial crisis, such as subprime mortgages and debt-backed mortgages.

The chairman of the anti-crypto SEC, Gary Gensler, remains

Despite Gruenberg’s resignation, the crypto industry still faces one major anti-crypto lawmaker: SEC Chairman Gary Gensler. Since becoming SEC chairman, Gensler has taken a more skeptical approach, using the analogy of “poker chips” to describe cryptocurrencies.

He warned Congress in October 2021 about the growing stablecoin market, highlighting the systemic risks involved. “I really think that if the rate continues to grow – and it has grown about tenfold in the last year – it could cause system-wide risk,” Gensler said.

Gensler escalated his cryptocurrency activities after the collapse of the FTX cryptocurrency exchange, which led to allegations of negligence against the SEC and Gensler himself. Last June, the SEC sued both Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest US-based crypto company.

The commission brought 13 charges against Binance and its U.S. affiliates, ranging from allegedly operating as an unregistered exchange to offering unregistered securities.

The regulator also indicted Coinbase, alleging that it acted as an exchange, broker or clearing agency without the required registrations.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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