Federal Deposit Insurance Corporation Releases Documents on Crypto Debanking

The Federal Deposit Insurance Corporation (FDIC) has released over 100 documents related to the controversial practice of “debanking” crypto companies and individuals. The documents, which include correspondence with 24 financial institutions, provide insight into the agency’s supervision of banks involved in crypto-related activities.

Background on Debanking

Crypto debanking, also referred to as Chokepoint 2.0, has been a contentious issue in recent months. The FDIC and the U.S. Securities and Exchange Commission (SEC) have faced criticism from industry stakeholders for their approach to regulating crypto assets and blockchain technology.

FDIC Acting Chairman’s Comments

FDIC acting chairman Travis Hill has been critical of the agency’s approach to crypto assets and blockchain technology. He stated, “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.”

“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.”

– FDIC Acting Chairman Travis Hill

Key Findings from the Released Documents

The released documents reveal that the FDIC largely resisted engagement with financial institutions regarding crypto-related activities. Key findings include:

  • Requests for additional information were frequently made, leading to delayed responses.
  • Directives were issued instructing banks to pause, suspend, or entirely avoid crypto-related activities.

Industry Reaction and Next Steps

The crypto debanking hearings will continue to shed light on the issue. Industry advocates, including Senator Cynthia Lummis, have commended the FDIC’s decision to release the documents.

“I am thrilled the FDIC acted swiftly & efficiently to release these documents. I want to thank Chairman Hill and POTUS for your commitment to government transparency! We are putting an END to Chokepoint 2.0.”

– Senator Cynthia Lummis

The FDIC has stated that it is reevaluating its approach to regulating crypto assets and blockchain technology. Key measures moving forward include:

  • Replacing its Financial Institution Letter (FIL) 16-2022.
  • Creating a clearer framework for banks to participate in the crypto sector.
  • Collaborating with President Trump’s working group on digital assets to establish new guidelines.

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