New York, Tuesday, November 05, 2024-The US Federal Deposit Insurance Corporation (FDIC) last week faced a backlash from the crypto industry following reports that it had sent multiple letters urging banks to pause their involvement in cryptocurrency services.
Coinbase, a leading cryptocurrency exchange, revealed these developments, accusing the FDIC of deliberately discouraging banks from engaging with digital assets.
Coinbase’s Chief Legal Officer Paul Grewal disclosed that the company has obtained “over 20 instances” of the FDIC advising financial institutions to “pause” or “refrain” from providing crypto-related services.
This information, obtained through a Freedom of Information Act (FOIA) request, suggests that the FDIC’s actions may be part of what is being dubbed “Operation Choke Point 2.0”—a perceived governmental effort to “de-bank” the crypto industry.
In one letter dated March 11, 2022, FDIC Assistant Regional Director Eric T. Guyot advised a bank to halt its crypto asset activities, citing concerns about the safety and soundness of the proposed products. Another letter from March 25, 2022, by Acting Regional Director Jessica A. Kaemingk, urged a financial institution to reconsider a digital asset offering due to safety concerns.
These revelations have sparked calls for transparency from the FDIC. Grewal criticized the FDIC’s tactics, calling for an open dialogue on the role of government in regulating cryptocurrency and the implications for innovation in the industry.
The letter can be seen here.
