Ripple CTO David Schwartz Criticizes Fed for Imposing Sanctions on United Texas Bank

David Schwartz expressed his worries after the Federal Reserve decided to require United Texas Bank to stop operating.

Ripple’s Chief Technology Officer (CTO), David Schwartz, has voiced his opposition to the Federal Reserve’s decision to impose sanctions on United Texas Bank. This criticism comes as the cryptocurrency industry faces increasing pressure from U.S. authorities.

Schwartz expressed his concerns after the Federal Reserve ordered United Texas Bank to cease operations. The bank was found to have deficiencies in its risk management and anti-money laundering (AML) controls, specifically related to cryptocurrency transactions.

Dennis Porter, co-founder of the Satoshi Action Fund, who shared the Fed’s decision in a tweet, also voiced his disapproval, asking, “When will this end.” According to Schwartz, these actions can be seen as a form of indirect regulation.

Instead of engaging directly with cryptocurrency companies on the issues at hand, the government targets their business partners. He argues that this approach deprives companies of their right to due process.

Schwartz further explained,

“When the government punishes your business partners for doing business with you, despite no direct action against you, it punishes you by depriving you of future business relationships and harming your ability to conduct business.”

Ripple’s legal battle with the SEC continues

This criticism from Ripple’s CTO comes as Ripple is still engaged in a legal dispute with the U.S. Securities and Exchange Commission (SEC). The agency claims that Ripple sold XRP as an unregistered security.

However, over the past year, Ripple has made significant progress in the case, winning several key battles and clearing legal hurdles. Several members of Congress have also raised concerns about the SEC’s regulatory approach, with some arguing that the agency has overstepped its authority.

Schwartz’s comments highlight the broader discontent within the cryptocurrency industry over what some perceive as overly aggressive regulatory tactics. While Ripple advances in its legal battle, the SEC could still appeal the recent court decisions.

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