Lummis Criticizes Fed Chair Powell’s Crypto Policies

TLDR

• Lummis claims Fed policies pressure banks against crypto services.
• She warns of potential insolvency for banks serving crypto.
• Future regulatory clarity remains a concern for the crypto sector.

Senator Cynthia Lummis has openly criticized Federal Reserve Chairman Jerome Powell, accusing him of targeting the crypto sector. Lummis expressed her views during a Senate Banking Committee hearing and elaborated on her concerns through an official statement.

Lummis, a U.S. Senator from Wyoming, is a known supporter of Bitcoin and the digital asset sector. She argues that Federal Reserve policies under Powell’s leadership unjustly pressure banks to limit services to crypto-linked entities. This criticism includes accusations about “Operation Chokepoint 2.0,” which she claims restricts services to certain industries. For more on her stance, Lummis criticizes Fed’s bias against the cryptocurrency sector.

Details on the Accusations Against Powell

Lummis highlighted what she sees as ongoing bias in the Federal Reserve’s approach to bank supervision. On June 25, 2025, Lummis remarked, “The Fed’s continued politization of bank supervision is a threat to both our financial system’s integrity and America’s competitive edge.”

She specifically blamed Powell for mismanaging practices that pressure banks to restrict services to cryptocurrency-related industries. Another aspect of her criticism involves supporting Rep. Anna Paulina Luna to refer Powell for perjury regarding renovation cost testimonies. Additional insights are available on the press releases from Senator Lummis.

Impact on Bitcoin and Crypto Sector

While no direct financial impact has been attributed to the Senate Banking Committee hearing, there is concern over future regulatory clarity. The ongoing debate around Fed policies potentially affects Bitcoin liquidity, financial services access, and regulatory transparency. The situation mirrors previous Operation Chokepoint scenarios that pressured crypto businesses, affecting overall liquidity.

Lummis, a Bitcoin supporter, warns that the Fed’s stance might drive solvent banks serving crypto into insolvency, pushing financial resources away from the sector. Historically, such pressures have led to decreased Total Value Locked (TVL) in DeFi, fluctuating BTC and ETH markets, and may even indirectly influence stablecoins like USDT and USDC.

Community Reactions and Future Implications

As of now, key cryptocurrency opinion leaders have not publicly commented on this specific event. Historically, figures such as Arthur Hayes and Raoul Pal have warned against regulatory actions that might limit innovation. Developer communities and forums express concern over perceived banking hostility and fully support calls for regulatory fairness.

The debate is drawing significant attention from political and financial sectors. While there is no confirmed fallout in terms of DeFi activity or asset prices, the situation could lead to further legislative or legal movements in the U.S. Similar scenarios in the past have led to increased offshore activities and pricing volatility.