Whistleblower Allegations Shake Confidence in the FDIC
Senator Lummis, a vocal advocate for digital assets, addressed FDIC Chair Marty Gruenberg in a letter highlighting disturbing accusations. Whistleblowers claim the FDIC destroyed critical materials related to its crypto operations and monitored staff to deter them from disclosing information to the Senate.
“The FDIC’s alleged actions are unacceptable and illegal,” Lummis wrote. She demanded the immediate preservation of all records tied to digital asset activities since January 2022, including communications about Signature Bank, Silvergate Bank, and crypto enforcement actions.
Operation Chokepoint 2.0: A Renewed Controversy
The allegations echo tactics from “Operation Chokepoint,” an Obama-era initiative targeting industries like firearms dealers and payday lenders by pressuring banks to sever ties with them. In its supposed modern iteration, Operation Chokepoint 2.0 allegedly focuses on marginalizing the crypto sector through indirect regulatory pressure.
Documents obtained by Coinbase through a Freedom of Information Act (FOIA) request revealed that the FDIC instructed banks to “pause all crypto asset-related activity” in 2022. This revelation added fuel to industry claims of unfair targeting and “debanking,” with financial services for some crypto firms being abruptly withdrawn without explanation.
A Senate Investigation Gains Momentum
Senator Tim Scott, the new Senate Banking Committee Chair, has joined Lummis in pursuing the matter. The duo has vowed to hold federal agencies accountable for any regulatory overreach. Lummis warned of potential criminal referrals to the Department of Justice if evidence shows the FDIC obstructed Senate oversight or destroyed materials.
“The American people deserve transparency, and I will see to it that they get the answers they deserve,” Lummis affirmed.
Industry Advocates Speak Out
Prominent crypto advocates have also weighed in. Brian Armstrong, CEO of Coinbase, and Caitlin Long, CEO of Custodia Bank, have both raised concerns about debanking practices. Attorney John Deaton labeled Operation Chokepoint 2.0 as regulatory overreach, driven by political motives rather than sound policy.
“This isn’t just a fight for crypto,” Deaton warned. “It’s a fight against the erosion of institutional integrity and the unchecked power of unelected bureaucrats.”
What’s Next for the FDIC and Crypto Oversight?
With Lummis and Scott demanding transparency and accountability, the coming months could mark a critical turning point for federal oversight of the crypto industry. The senator’s investigation underscores broader concerns about the balance of power between regulators and emerging industries.
The outcome of this probe could reshape not only crypto policy but also how federal agencies interact with innovative sectors. For now, all eyes are on the FDIC as it faces mounting scrutiny from lawmakers and industry leaders alike.
