Senator Lummis Criticizes Fed Chair Powell Over Crypto Policies

TLDR

• Lummis accuses Powell of anti-crypto bias and mismanagement.
• Federal Reserve policies hinder access to banking for crypto firms.
• Operation Chokepoint 2.0 pressures banks against crypto-related businesses.

U.S. Senator Cynthia Lummis has publicly criticized Federal Reserve Chair Jerome Powell, accusing him of unfairly targeting the cryptocurrency industry. Lummis, who leads the Senate Banking Subcommittee on Digital Assets, has called for Powell’s resignation, arguing that the Federal Reserve’s policies under his leadership have significantly harmed digital asset firms and curtailed innovation in the sector.

This development underscores ongoing tensions between regulatory bodies and the cryptocurrency sector, particularly regarding bank service access. Lummis is a vocal advocate for Bitcoin reserves and regulatory clarity for digital assets, often opposing what she perceives as regulatory overreach affecting the crypto industry.

Senator Lummis’s Stance on Digital Asset Regulation

Cynthia Lummis has consistently supported legislative measures designed to foster the growth of digital assets, including Bitcoin. In her tenure, she has pushed for establishing Bitcoin reserves at both state and federal levels while opposing heavy-handed regulatory actions.

Lummis has sponsored multiple pieces of legislation aimed at providing clearer regulatory frameworks for cryptocurrencies. Her comments follow her earlier remarks from June 23, 2025, posted on X, where she acknowledged the Federal Reserve’s decision to remove reputational risk from the bank supervision process, marking it as a partial victory but asserted more work was needed.

Allegations Against Jerome Powell

Senator Lummis’s criticism of Jerome Powell centers around what she describes as mismanagement and bias against the cryptocurrency industry. She accuses Powell of leading anti-crypto policies and mismanaging the Federal Reserve’s resources, resulting in stifled innovation.

Supporting these allegations is Representative Anna Paulina Luna, who has expressed concerns regarding Powell’s handling of Fed policies and has raised the issue of potential perjury related to Fed leadership practices. These claims are exacerbated by what crypto advocates see as a targeted campaign against digital assets through initiates like “Operation Chokepoint 2.0.”

Impact on the Cryptocurrency Sector

The sector has been impacted by the Federal Reserve’s stance, with firms facing challenges in accessing traditional banking services. “Operation Chokepoint 2.0” purportedly pressured banks to discontinue services to crypto-related businesses, leading to financial difficulties for many firms. There are no recent federal grants reported to support crypto development following these events.

The digital ecosystem, particularly Bitcoin (BTC) and Ethereum (ETH), relies heavily on fiat on/off ramps and institutional custody solutions, which have been affected by these policies. While no direct on-chain data has been published in relation to these developments, historical patterns suggest regulatory uncertainties often result in market volatility.

Reactions from the Industry and Policy Analysts

While major protocol teams have not yet issued public statements, discussions among crypto policy analysts on platforms like Twitter reflect a call for increased transparency and fairness. Lummis’s statements have found some echo among these analysts, who emphasize the need for a balanced approach to industrial regulations.

The Federal Reserve’s recent decision to rescind ‘reputational risk’ as a factor in bank supervision offers a glimpse of potential changes in policy direction. However, as of now, no new statements from significant regulatory groups like the SEC or the CFTC specifically addressing the Senate hearings have emerged.

The Fed’s continued politization of bank supervision is a threat to both our financial system’s integrity and America’s competitive edge, and the days of the Fed hiding its policy bias and mismanagement are over.

Cynthia Lummis, U.S. Senator, Banking Subcommittee Chair