Former Acting Comptroller of the Currency and current Binance.US CEO Brian Brooks warned against a tightening regulatory climate in Washington that could be unfavorable to crypto upstarts.
“There has never been a national trust bank that was not accepted as a member of the [Federal Reserve], and so the idea that somehow these trust banks could be excluded just because they’re engaged in custodying crypto, that’s not only a crazy idea, it’s a dangerous idea,” Brooks said.
The statement comes as the Federal Reserve seeks comments on a proposal to grant certain chartered institutions access to its master accounts and speaks to the potential politicization of the crypto economy.
While it seems that entities chartered through regulations like Wyoming’s Special Purpose Depository Institution rules could be granted access if the proposal is adopted, it’s not clear whether OCC-chartered crypto trust banks will also be allowed access.
Paxos, Protego and Anchorage, the three crypto-native firms to have received conditional charters from the formerly Brooks-led Office of the Comptroller of the Currency (OCC), do not currently have access to the Fed’s master accounts, meaning they still need bank partners to settle some transactions.
While the Fed hasn’t explicitly said it would exclude OCC-chartered banks, Brooks comments show it’s far from a settled matter.
“The idea that a bank that is custodying fine art collections or rare wines gets access to the Fed but a bank that is custodying crypto private keys can’t, I mean, somebody explain to me what is the rationale for that other than just rank politics,” Brooks said. “That’s a really bad idea when we politicize the banking system.”
He likened the prospect to “deplatforming” on social media.
“You don’t want some politically appointed person saying which banks get access to the central bank and which banks don’t get access to the central bank,” he said in an interview with CoinDesk’s Nikhilesh De during the Consensus 2021 conference.
A long four weeks
Beyond his assessment of the current situation in Washington, Brooks reiterated key goals for the crypto exchange he’s been at the helm of for a mere four weeks.
“These four weeks would be a year in any other job, I have to say,” he quipped.
Goals include bolstering customer support and focusing on hiring. Binance.US has scaled quickly but has also been hit with a rash of customer complaints.
“On a given day we’re trading between $3 and $4 billion of spot market transactions on a platform that didn’t exist 24 months ago and only has 100 employees,” Brooks said, “so you can sort of imagine what that looks like.”
This is, in part, why customers are seeing a wide variety of issues, conceded Brooks.
“You will quickly lose hearts and minds if people can’t onboard fast enough or if they find themselves deplatformed for a reason that they don’t understand or locked out of their account for a period of time,” said Brooks. “I’d be lying if I said we didn’t have a real problem in this area.”
To that end, the company has hired a new head of customer support and is “10x-ing the customer support team,” Brooks said.
Another reason for the customer support issues is that Binance.US licenses some of its technology from Binance, meaning the U.S. affiliate doesn’t have full control over it.
That means code updates sometimes ship in the middle of the night, with Binance.US learning about them, and the issues they may cause, at the same time as customers, according to Brooks.
“We’re fixing that by migrating all of our technology onshore over the next few months,” he said. “One of the most important initiatives that I’m working on today is to achieve full technology independence, over a short amount of time.”
Brooks highlighted Binance’s BNB token as an “insanely important customer loyalty” vehicle for the exchange – and one that could be farmed out to other firms.
“Some of the early work that we’ve been doing since I joined the company is talking to arts brands, record labels, major consumer ecommerce platforms and others about how the lessons of the BNB token could be adapted in their businesses,” said Brooks.
He raised the prospect that Binance.US could “literally white-label” a loyalty token for an airline, a consumer brand or a tight-knit artistic community.
“[They could] extract value from their community and create stickiness in their world the same as we create stickiness to our world with BNB,” he said. “And we can trade their tokens.”
The big-brand tokenization play, he said, is an example of the exchange chasing an “internet model, not a financial services model.”
“Look at Google, not Bank of America, as what we aspire to,” said Brooks.