Federal Deposit Insurance Corporation (FDIC) interim Chair Travis Hill acknowledged the agency’s role in “debanking” crypto firms during a speech in St. Louis on Jan. 10. 

Hill pointed to accounts of crypto-related businesses losing access to banking services without explanation, placing them alongside historically debanked groups such as politically disfavored industries and individuals associated with controversial religious or political affiliations.

He asserted that such efforts are “unacceptable” and incompatible with the FDIC’s mission to reduce the number of unbanked Americans. Hill added:

“A longstanding goal of the FDIC’s has been to decrease the number of people who are unbanked. Efforts to debank law-abiding customers are unacceptable.” 

Hill’s remarks bring new clarity to what critics have called “Operation Chokepoint 2.0,” an alleged effort by the President Joe Biden administration to hinder US crypto industry growth.

He further urged regulators to end debanking practices and emphasized that the FDIC must ensure no staff members engage in tactics that pressure banks to drop law-abiding customers.

Nic Carter, co-founder of Coin Metrics, said Hill’s admission is a “massive sea change at the agency.” He added that he expects things will “change in a huge way” on Jan. 20, when President-elect Donald Trump takes office.

No more pause letters

The interim chair also criticized the FDIC’s current approach to crypto, which he described as overly cautious and stifling innovation. 

He highlighted revelations that the FDIC sent “pause” letters to over 20 banks, instructing them to halt crypto-related activities. These actions, he said, contributed to the perception that the FDIC is hostile toward blockchain and distributed ledger technologies.

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Author: Gino Matos