US Treasury Secretary Mnuchin Taps Brian Brooks to Lead OCC
US Treasury Secretary Steven Mnuchin, a long term crypto denier, has pegged his former OneWest Bank colleague Brian Brooks to lead the US in building a central bank digital currency. In his new role as Chief Operating Officer and First Deputy Comptroller of the OCC, Brooks leaves his position as Chief Legal Officer of America’s biggest cryptocurrency exchange, Coinbase. The OCC, established in 1863, is America’s primary regulator in charge of banks and federal savings associations
“Our #1 issue (with cryptocurrencies) is that we don’t want bad actors using crypto. That’s our number one issue.”Steven Mnuchin, July 2019
In a month wrenched with tanking markets and a worldwide economic meltdown catalyzed by Coronavirus, this news both dismayed and encouraged the cryptoverse. On one hand, industry participants look to the attention this will bring to crypto markets. Especially at a time when digital assets may provide an alternative to failing fiat systems.
On the other hand, the crypto community as a whole has been critical Coinbase. Not only becaues of their deep connections with US regulators, but also due to the quality of services they provide. From problems with account recovery, to lost funds and a purported low level of customer service, negative reviews about the Coinbase exchange keep piling up. For instance, Trust Pilot alone has over 2000 Coinbase reviews, the majority of which are negative. When Coinbase agreed to hand over the data for 13,000 of its users to the IRS (per court order), the crypto community held a collective gasp.
While handling this negative press and platform problems, Coinbase managed to push its user base to over a million. It remains one of the easiest (albeit one of the most expensive) platforms to use for crypto newbies. On top of that, Coinbase has worked closely with regulators on crypto compliance with Brian Brooks as their legal expert.
Who is Brian Brooks?
Brian has been the leading legal counsel to America’s largest cryptocurrency exchange since September of 2018. His experience in both the crypto industry as well as traditional finance mainstays like Fannie Mae gives him a unique perspective into government and industry relations.
At Fannie Mae, he led compliance for four years. At the time, the company was holding roughly $3.2 trillion in assets. Previously, he’d been the Vice Chairman of OneWest Bank, where Steven Mnuchin also served as CEO and Chairman. Additionally, Brooks spent time as a Managing Partner at DC-based O’Melveny & Myers, LLP.
In January of 2020, Brian published an article on Forbes titled, “Three Cryptocurrency Regulation Themes For 2020 – And The Flawed Premises Behind Them”. There, he debunked three of the US government’s main crypto regulation themes:
- Crypto pose a threat to monetary policy
- They also pose unique risks of illegal activities
- Privacy coins undermine national security
In the article, Brooks goes on to explain in detail how regulators have fallen into these narratives while in a rush to create and implement rules for a fast growing sector. This urgency can only be magnified in this era of falling markets. However, it appears he is in a strong position to lead a push to a central bank digital currency in the US.
Hit by this news amid growing concerns around Coronovirus and economic instability, the cryptocurrency industry had mixed views. Bitcoin educator Marty Bent tweeted that Mnuchin bringing in his old crony “…brings me much joy when I look back and reminisce about how powerless governments were in the face of Bitcoin’s success.”
David Waslen, CEO and Co-founder of HedgeTrade, shared his thoughts on this appointment of Brooks:
“This seismic move by the US administration to embrace digital currency is a lot to digest. Many questions are now being raised. Will this be good for the cryptocurrency industry? Is it just an attempt to save the troubled dollar before China rolls out its central bank digital currency? The recurring theme to all this seems to be: If ever there was a time for the US to get a central bank digital currency under way, now would be that time. There is a lot going on in the markets right now. This is yet another storyline that demonstrates the volatility of these times.”
With Brian Brooks heading up the legal end and with a position of power within the US economy, a US backed digital currency certainly seems plausible. Many cryptocurrency enthusiasts may not consider it a benevolent coin so to speak. But they cannot deny the exposure to crypto this will produce in the short run. In the long run, there’s always bitcoin.