An interesting situation is unfolding in U.S. cryptocurrency regulation. At a hearing of the Senate Committee on Banking this week, crypto topics completely dominated the agenda—especially after the OCC introduced its proposal on stablecoins. The Office of the Comptroller of the Currency has effectively tried to roll back most of the requirements of the GENIUS Act on stablecoins, which was signed into law last year.

The proposal would set standards for stablecoin issuers—from reserve requirements to how companies will hold assets and how customers can redeem tokens. The OCC said the stablecoin industry can develop safely under such a framework. At the same time, the ФРС is also working on its own regulatory requirements for capital and liquidity for stablecoin issuers, as required by the same GENIUS Act.

But here’s where the drama starts. Senator Elizabeth Warren sharply criticized the rapid approval of Erebor Bank, which received a license from the OCC. In her view, this looks like a political corruption deal—because Erebor’s sponsors were major donors to Trump and his team. Warren even pointed out that the lawyer who filed the application for Erebor’s charter later quickly took a job at the OCC itself as a senior deputy comptroller. Sounds suspicious, doesn’t it?

Warren wrote a letter to regulators, demanding explanations regarding this approval. She suggested that Erebor was meant to become a hub for a related set of Silicon Valley firms owned by these billionaires and their friends. If an investigation shows that Erebor’s national banking charter was granted not according to the law, but through political favoritism, it should be revoked.

This shows how the cryptocurrency industry has become part of a broader political arena. On the one hand, regulators are trying to create clear rules for the development of crypto. On the other hand, questions arise about whether it’s being done fairly. Erebor has become a symbol of this tension. It will be interesting to see how this develops further.