Martin Gruenberg, the chairman of the Federal Deposit Insurance Corporation (FDIC) in the United States, has announced his decision to step down from his position. This comes after a thorough investigation revealed a toxic workplace culture within the bank regulator.
In an email sent to staff on May 20, Gruenberg expressed his readiness to step down once a successor is confirmed. He stated, “In light of recent events, I am prepared to step down from my responsibilities. Until that time, I will continue to fulfill my duties as Chairman of the FDIC, including the necessary transformation of the FDIC’s workplace culture.”
The FDIC is an independent government agency that provides insurance for depositors in American commercial and savings banks.
The announcement comes after a third-party investigation, published on May 7, exposed allegations of sexual harassment and other forms of interpersonal misconduct within the FDIC, as well as the management’s response to these incidents.
On May 15, Gruenberg testified before Congress regarding the widespread sexual harassment allegations and mistreatment of subordinates. He faced criticism from both Republicans and Democrats, who expressed their anger, dismay, and disbelief at the extent of the issues within the FDIC, according to Reuters.
Lawmakers have called for Gruenberg’s resignation, and Senate Banking Chair Sherrod Brown joined the chorus in urging President Biden to find a replacement for Gruenberg. The White House has confirmed its intention to nominate a new candidate for the position of FDIC chair.
However, Senator Elizabeth Warren expressed confidence in Gruenberg’s ability to bring about change within the agency.
The crypto community has welcomed Gruenberg’s decision, with Nic Carter, a partner at Castle Island Ventures, describing it as “the best day ever.”
Digital asset industry lawyer John Deaton commented on the development, stating:
“Gruenberg is believed to have played a significant role in facilitating Operation Choke Point 2.0. Coined by Nic Carter in 2023, this term refers to a coordinated effort led by the FDIC to discourage banks from holding crypto deposits or providing banking services to crypto firms.”
In a speech delivered in October 2022, Gruenberg compared crypto assets to the risky financial innovations, such as subprime mortgages and collateralized debt obligations, that contributed to the 2008 financial crisis.
As the news of Gruenberg’s departure spreads, the question arises: What exactly do crypto market makers do? Are they responsible for liquidity or manipulation?