Biden nominees emerge from Senate confirmation hearings unscathed

The Senate Banking Committee gathered on Thursday to hear from four of President Joe Biden’s nominations for positions at federal agencies.

US Securities and Exchange Commissioner Caroline Crenshaw, nominated for another term at the securities regulator, mostly flew under the radar. Committee members directed more questions to Christy Goldsmith Romero, President Biden’s pick to chair the Federal Deposit Insurance Corporation.

Kristin Johnson, put up to be an Assistant Secretary of the Treasury, and Gordon Ito, nominated to be a member of the Financial Stability Oversight Council, also faced questions Thursday.

Mentions of cryptocurrencies or digital assets were sparse, as committee members largely opted to use their allotted time to discuss recent cultural issues at the FDIC.

Goldsmith Romero stands to take over the FDIC as the agency finds itself embroiled in controversy. A report from May uncovered allegations of sexual harassment and discrimination at the FDIC, raising questions about whether current Chair Martin Gruenberg should continue in the role.

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Goldsmith Romero told Senators Thursday she planned for a “complete overhaul” of the agency should she be approved. This would include firing perpetrators of harassment or abuse and implementing a new system for registering complaints.

In a show of support, during prepared remarks at the start of the hearing, Sen. Mark Warner, D-Va., highlighted Goldsmith Romero’s track record with engaging with the crypto and AI industries.

“Having knowledge, a technology-based knowledge about how AI is going to change our systems and our banking regulations, and blockchain and the whole realm of digital assets, this is exactly the kind of experience we need at this troubled agency at this point,” Warner said.

Having support from Warner, a moderate Democrat, could prove invaluable to Goldsmith Romero, who has faced some criticism from Republicans that she is unqualified to lead the FDIC. Committee members on Thursday however seemed largely satisfied with her answers, so we expect she is feeling relieved.

In a second brief mention of crypto, long-time industry advocate Sen. Cynthia Lummis asked Goldsmith Romero if she thought banks should be allowed to hold the assets of digital asset companies.

“Banks do hold custody of digital assets right now,” Goldsmith Romero said.

“I don’t think it’s the FDIC’s role to tell banks what industries or companies they should be providing services to,” she added.

Lummis did not ask Crenshaw any questions during her allotted time.

On Thursday, Crenshaw, like the other nominees, used the stage as an opportunity to defend her record. She specifically mentioned the agency’s decision to allow bitcoin spot ETFs to begin trading at the start of the year, a position she dissented.

“Given the significant fraud in the underlying spot markets globally,” the SEC should not have allowed these products to go live, she told Senators.

A shorter version of this article first appeared in Friday’s On the Margin Newsletter. Sign up here to never miss an issue.

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