FDIC Releases Several Documents on Crypto Debanking and Choke Point 2.0

The FDIC just released 175 documents detailing its previous directives and suppression of banks’ commerce with crypto businesses. This tranche of documents is connected with Congressional investigations into Operation Choke Point 2.0.

Acting FDIC Chair Travis Hill wrote a statement accompanying this release. Hill criticized these anti-crypto initiatives while he was the Vice Chair and has since been promoted.

The FDIC’s War on Crypto

The FDIC has a sordid history with the crypto community, as it directly spearheaded a huge example of regulatory overreach. Under the alleged Operation Choke Point 2.0, banks were directed to cut off cryptocurrencies, and we still don’t know the full extent of this campaign.

However, FDIC Acting Chairman Travis Hill is seeking to change that by releasing 175 relevant documents.

“I have been critical in the past of the FDIC’s approach to crypto assets and blockchain. As I said last March, the FDIC’s approach ‘has contributed to a general perception that the agency was closed for business if institutions are interested in anything related to blockchain or distributed ledger technology,'” Hill claimed in an accompanying press release.

In the past four years, the FDIC severely damaged relationships between crypto and banks, prompting the community to build its own institutions. The winds are finally changing under the current administration.

Hill criticized the FDIC’s anti-business policies before he became Acting Chair. President Trump has considered abolishing the FDIC outright and has given Hill this promotion in the meantime.

Regardless of what will happen to the FDIC long-term, its relationship with crypto is actively changing. The House Oversight Committee has begun an investigation of Operation Choke Point, and the Senate Banking Committee has its own investigation.

This tranche of documents was released in coordination with the latter investigation.

“Imagine you’re a startup with a groundbreaking WEB3 app that wants to transform the way people pay for food using crypto. You approach your bank, excited to implement this new payment method, but the bank, under the watchful eye of the FDIC, hesitates. They keep saying, ‘We need more information,’ or ‘Let’s wait,’ or simply don’t respond, leaving your app in limbo. This is similar to what banks have experienced when trying to explore or offer crypto services,” wrote Web3 entrepreneur Angelica Saldaña.

The US legislature is seriously investigating how the FDIC fought against the crypto industry. Tomorrow, Coinbase’s Chief Legal Officer is scheduled to testify about Operation Choke Point and other debanking efforts.

These efforts will likely help chart a new course for federal crypto enforcement. Ultimately, these investigations are still in the early stages, and many critical factors are in play.

President Trump is proposing a sweeping transformation of the federal government with the help of Elon Musk and D.O.G.E. If he does abolish the agency in the future, it could mean even lower enforcement for the crypto industry.

However, these developments are still questionable. For now, it’s evident that federal investigations will continue to assess the depth of operation Choke Point 2.0.

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