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“Regulation through exhaustion”: see how the FDIC was forcing banks to stop services to crypto clients

Press Releases Crypto News Crypto-News “Regulation through exhaustion”: see how the FDIC was forcing banks to stop services to crypto clients

On Feb. 5, 2025, the Federal Deposit Insurance Corporation released 175 documents from the Biden-era FDIC correspondence ahead of the U.S. Senate Banking Committee GOP hearing on the debanking of crypto companies. New documents reveal new details of the so-called “Operation Choke Point 2.0.”

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Following Trump’s inauguration, a pro-crypto team took the FDIC over and sided with Coinbase in the battle against the alleged debanking of the companies working with cryptocurrency.

In 2024, Coinbase sued the FDIC. The move allowed the company to use the Freedom of Information Act to force the agency to release some of its correspondence with financial institutions. The FDIC released a portion of heavily redacted documents now known as the “pause letters.”

Those letters showed that the FDIC was pressing financial institutions to pause all the operations of the companies using cryptocurrencies, effectively stripping them of the right to use banking services without a proper cause. This practice cemented the growing concerns of the ongoing “Operation Choke Point 2.0” under the Democratic administration.

The new FDIC team is critical of their predecessors and released the new documents voluntarily, without relation to Coinbase exercising the FOIA.

What’s inside the new batch of the FDIC correspondence

Another 175 documents from the FDIC were compiled for release after the review made under the new chair, Travis Hill. The release date coincides with the start of the Senate hearing entitled “Investigating the Real Impacts of Debanking in America.” The documents may serve as additional evidence of the Biden-era FDIC’s efforts to block businesses dealing with cryptocurrency out of banking services.

The newly released documents revealed that the FDIC pressed on more companies to debank the crypto clients. The efforts of the banks to resist or ask additional questions were met with silence from the FDIC that could last for months. On some occasions, the FDIC sent directives to suspend or refrain from all crypt

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Author: Alexey Borovets

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