FDIC Releases Documents on Crypto Debanking Ahead of Congressional Hearing
Just before a scheduled congressional hearing on banking and financial visits, the Federal Deposit Insurance Corporation (FDIC) issued 175 documents related to the oversight of banks it engages in or attempts to engage in cryptocurrencies. Press release.
Banks stop crypto activities due to regulatory barriers
Acting FDIC Chairman Travis Hill said the release of the documents would increase transparency. The move also attempts to exceed the requirements of the Freedom of Information Act (FOIA). He also noted that the documents indicated that banks faced obvious boycotts, including repeated requests for more information, prolonged delays and directives to suspend or restrict their cryptocurrency and blockchain activities. These actions make it difficult for banks to move forward. As a result, the vast majority of banks just stopped trying.
The FDIC earlier shared 25 “pause” letters sent to 24 institutions exploring blockchain and cryptocurrencies. The new document includes more letters with these institutions and other communications with other banks not listed previously.
Is this the end of operating Chokepoint 2.0?
In addition, Senator Loomis praised the FDIC for its speed in issuing documents. She shouted, “We are ending Cokepoint 2.0.”
Document releases are ahead of a scheduled Congressional hearing on banking and financial visits. The hearing may address concerns about the FDIC’s past approach to crypto-related activities and the broader issues concerning financial institutions’ regulation.
FDIC reevaluates its approach to crypto-supervision
The FDIC is reevaluating its approach to crypto supervision and aims to allow institutions to work with encryption and blockchain while ensuring security. In addition, the FDIC looks forward to working with the Presidential Digital Asset Markets Working Group created by the Executive Order of January 23, 2025.
