US Senator Threatens FDIC Staff with Criminal Referrals Over Alleged Document Destruction

Senator Cynthia Lummis of Wyoming has issued a stern warning to staff at the U.S. Federal Deposit Insurance Corporation (FDIC), threatening criminal referrals for anyone found involved in the alleged destruction of documents related to “Operation Choke Point 2.0” (OCP 2.0). The initiative, a multi-agency crackdown on crypto businesses, aims to deny the sector access to banking services.

Background on Operation Choke Point 2.0

OCP 2.0 has been dubbed an anti-crypto campaign by industry advocates. The initiative involves a coordinated effort to prevent crypto companies from accessing essential banking services, hindering their growth and operations. Whistleblowers at the FDIC have alerted policymakers to alleged efforts within the agency to withhold and destroy information regarding OCP 2.0.

Lummis Demands Preservation of Documents

In a letter addressed to FDIC Chair Marty Gruenberg, Senator Lummis demanded the preservation of all relevant materials, including those related to the wind-downs of Signature Bank and Silvergate Bank. Lummis also expressed concerns that staff access to these materials is being closely monitored by management to prevent them from being supplied to the Senate before they can be destroyed.

I have also been informed by whistleblowers that staff access to these materials is being closely monitored by management to prevent them from being supplied to the Senate before they can be destroyed and that certain staff have been threatened with legal action to prevent them from speaking out. This is illegal and unacceptable.

Lummis emphasized that if it is uncovered that FDIC staff have knowingly destroyed materials or sought to obstruct the oversight functions of the Senate, it will result in swift criminal referrals to the U.S. Department of Justice.

Crypto Community Reacts

Industry advocates have welcomed Senator Lummis’ stance on the issue. Nic Carter, a prominent crypto figure, expressed optimism that justice is finally being served, stating, “Almost shed a tear reading this to be honest with you. Justice is coming. We’ve fought for two years now for the truth, and we’re finally going to get it.”

Key Developments in the OCP 2.0 Saga

The battle over OCP 2.0-related documents has been a contentious issue between the FDIC and crypto participants. Key developments include:

  • Coinbase, a leading crypto exchange, has sued the FDIC for access to files, including the so-called “pause letter,” which allegedly directed financial institutions to “de-bank” crypto businesses.
  • A judge ordered the FDIC to submit the relevant documents, but Coinbase argued that the provided information was heavily redacted.
  • A second court order chastised the federal agency for bad faith practices related to the case and demanded that the FDIC engage in full cooperation.
  • The latest turnover from the FDIC revealed an attempt to cover up OCP 2.0 as the agency surprisingly released more documents after the court’s scrutiny, according to Coinbase CLO Paul Grewal.

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