TL;DR
- The FDIC allegedly requested U.S. banks to suspend cryptocurrency-related activities due to regulatory uncertainty.
- The documents were obtained through a FOIA lawsuit filed by Coinbase, fueling controversy over the “Operation Chokepoint 2.0″ initiative.
- The revelation of the documents could imply regulatory changes in the U.S., with the upcoming departure of FDIC Chairman Martin Gruenberg.
Recently revealed court documents have shed new light on actions taken by the U.S. Federal Deposit Insurance Corporation (FDIC), which reportedly asked several banks to suspend their cryptocurrency-related activities.
The information was obtained through a Freedom of Information Act (FOIA) lawsuit filed by History Associates on behalf of Coinbase. The documents include letters sent by the FDIC to the boards of directors of U.S. banks in 2022, in which the agency requested the suspension of all crypto asset-related activities due to the regulatory uncertainty surrounding them.
According to these letters, the FDIC indicated that it would notify the affected institutions at a later date about the regulatory expectations for engaging in crypto asset-related activities, which raised concerns about the U.S. government’s stance toward companies in the sector. The letters also mentioned that banks would need to provide additional information before offering new cryptocurrency-related services.
The revelation of these documents has fueled controversy over the so-called “Operation Chokepoint 2.0,” an initiative that, according to many in the industry, seeks to pressure banks into severing ties with crypto companies. The term refers to a similar effort by the previous administration that focused on eliminating high-risk activities, such as payday lenders, from banks. Paul Grewal, Coinbase’s chief legal officer, stated on social media that these documents confirm that the alleged campaign to “debank” cryptocurrency companies was not just a conspiracy theory.
FDIC Leadership Change Could Bring More Clarity to the Crypto Industry
On the other hand, several executives from crypto companies have confirmed being contacted by banks in 2023, who informed them that their accounts would be closed due to their ties to cryptocurrencies. Coinbase continues to investigate whether the U.S. government has violated the law by taking actions that affect companies in the sector.
The news also has implications for the future direction of the FDIC, as its chairman, Martin Gruenberg, will retire on January 19, just before the inauguration of the Donald Trump administration, which could shift the course of regulatory policies toward cryptocurrencies in the U.S.