FDIC's Crypto Debanking Secrets Exposed Ahead of Congressional Hearing

FDIC Releases Documents on Crypto Debanking Ahead of Congressional Hearing

The Federal Deposit Insurance Corporation (FDIC) has released a tranche of documents detailing its previous directives and suppression of banks’ commerce with crypto businesses. This release coincides with ongoing investigations into Operation Choke Point 2.0, which allegedly targeted the crypto industry by limiting its banking access. The FDIC’s Acting Chair, Travis Hill, criticized these anti-crypto initiatives and has been promoting a more open approach to the industry.

The FDIC has a history of regulatory overreach in the crypto space, having spearheaded Operation Choke Point 2.0. The newly released documents provide insights into the agency’s past actions and may help shape its future approach to the crypto industry. The House Oversight Committee has begun an investigation into Operation Choke Point, and the Senate Banking Committee is also conducting its own investigation. These investigations will likely help chart a new course for federal crypto enforcement.

Coinbase’s Chief Legal Officer, Paul Grewal, is set to testify at a hearing on February 6th, alongside Fred Thiel, CEO of crypto mining firm MARA. Grewal has argued that documents secured by Coinbase show the FDIC was attempting to sabotage a wide variety of activity in the crypto industry. Coinbase filed Freedom of Information Act requests related to the FDIC’s letters to banks about crypto services, which resulted in the release of letters showing the FDIC asked certain financial institutions to “pause” crypto banking activities.

These developments suggest a shift in the FDIC’s approach to the crypto industry. The agency’s new leadership appears more open to engaging with the crypto community and may be willing to reevaluate its past actions. As investigations into Operation Choke Point continue, the crypto industry can expect further developments in federal crypto enforcement.