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A bombshell report detailing a culture of rampant sexual harassment, misogyny, and lewd behavior at the Federal Deposit Insurance Corp. (FDIC) was published by the Wall Street Journal on Monday—prompting some crypto leaders to affirm the pervasiveness of sexism in the banking sector, and others to suggest political motivations were behind the timing of the story’s release.

The article recounted numerous instances in which female FDIC employees were reportedly propositioned for sex by male superiors, sexually harassed in the workplace, felt pressured to drink or to visit strip clubs by male colleagues, or received negative performance evaluations that were either implicitly or explicitly linked to their gender. And it resonated with crypto executives who said they have previously encountered similar behavior in the finance sector. 

“Banking is still a boys club,” Caitlin Long, the founder and CEO of crypto-friendly bank Custodia, wrote on Twitter. “I spoke at a US banking conf [sic] last year where a comedian was so raunchy that women walked out in droves—far worse than anything I’d seen ‘crypto bros’ do.”

Long appeared to be voicing frustration at critics of the crypto sector who seize upon its hostility to women, without acknowledging that such issues are either less extreme than, or endemic to, a broader and much longer-standing culture of sexism in American banking.

She has previously accused federal banking institutions of other forms of hypocrisy. For years, the Federal Reserve has refused to issue Long’s Custodia Bank a standard accreditation that would allow it to perform traditional bank functions. Long is currently in the midst of a lawsuit that alleges the Fed is illegally attempting, under false pretenses, to prevent Custodia from operating, likely because the bank is amenable to crypto.  

Other crypto executives and analysts similarly seized on the rapidly unfurling FDIC scandal to question the assumption that the traditional banking system is more legitimate and trustworthy than the digital assets industry. 

“The nation’s top banking regulator has a party culture rife with misconduct going back decades,” Sam Callahan, a blockchain analyst, wrote Monday. “But don’t worry—these folks have your back in the next banking crisis.”

“These are the people that lecture banks about [the] ‘safety and soundness’ risks of banking ordinary crypto businesses,” crypto VC and analyst Nic Carter added.

Some crypto leaders took critiques of the traditional banking system a step further, though, to the point of openly questioning why the Journal article was published now, and whether the story might benefit traditional banking entities. 

The Journal’s story implied that high employee turnover at the FDIC was related to its allegedly toxic workplace, for example, which in turn was a key factor that prevented the regulator from properly anticipating the failure of multiple major regional banks, including crypto-friendly Silicon Valley Bank

Some crypto executives, including BitMEX co-founder Arthur Hayes, found such a narrative suspicious. 

“Is it an attempt to paint the failure of the regional banks as the result of [a] badly behaved singular regulator rather than the result of a deliberate monetary policy choice of the Fed and US Treasury?” Hayes asked. 

Tomorrow, FDIC leaders are set to testify before the U.S. Senate Banking Committee during a session that was likely to cover crypto and de-banking, according to Ron Hammond, Director of Government Relations at the Blockchain Association, a crypto lobbying firm. 

Now, the hearing will certainly be colored by the stories of the FDIC’s toxic workplace culture. 

“Call me a cynic, but there has to be a reason why this was leaked now,” Carter mused.

Edited by Ryan Ozawa.

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