On February 5, 2025, the Federal Deposit Insurance Corporation (FDIC) made public 175 internal documents from its Biden-era operations. These disclosures come ahead of a crucial U.S. Senate Banking Committee hearing addressing the systematic exclusion of cryptocurrency companies from banking services, a practice dubbed “Operation Choke Point 2.0.”
Key Revelations from the FDIC Document Release
A Shift in Leadership and Strategy
With a new administration taking charge, the FDIC has undergone a significant transformation. Under President Trump, a more crypto-friendly leadership emerged, advocating for fairer banking practices. Coinbase, a major player in the crypto sector, took legal action against the FDIC in 2024, leveraging the Freedom of Information Act (FOIA) to expose questionable regulatory tactics.
As a result, heavily redacted documents—commonly known as “pause letters”—surfaced, revealing how the FDIC pressured financial institutions to cease operations with crypto-related businesses. These documents have reinforced concerns about a targeted effort to isolate cryptocurrency enterprises from the financial system.
Unlike previous disclosures compelled by legal battles, the latest batch of FDIC documents was released voluntarily under the direction of new Chairman Travis Hill. This move signals a departure from past regulatory practices and offers deeper insights into the agency’s previous stance on crypto banking.
How the FDIC Restricted Crypto Banking
The newly released documents provide further proof of regulatory pressure exerted on banks to disengage from crypto clients. Banks attempting to seek clarity or resist these measures reportedly faced prolonged periods of non-response from the FDIC—often lasting months. In some cases, the agency issued direct orders instructing financial institutions to halt all blockchain or cryptocurrency-related activities.
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted key sections of the documents on social media platform X, describing FDIC’s actions as “regulation by exhaustion.” He shared an instance where a bank initially permitted Bitcoin (BTC) transactions but later faced regulatory roadblocks that led to a complete cessation of crypto-related services.
“One bank had allowed BTC purchases, but @FDICgov paused expansion, then an exam effectively killed the whole thing.“
The documents further reveal that even when banks and regulators reached agreements that allowed limited banking services for crypto firms, the FDIC sought additional restrictions, ultimately leading to complete service terminations. Despite reassurances from banks regarding compliance and risk management, the FDIC consistently rejected their attempts to continue offering financial services to crypto companies.
“This one is particularly interesting. It’s an April 2022 @FDICgov internal note describing info learned from a meeting with a bank after sending them a pause letter in March 2022. Despite indicating that the bank performed due diligence and the customers’ BTC would not be on the…”
A Surprising Bipartisan Response
The Senate hearing on February 5, 2025, witnessed an unexpected turn of events as lawmakers from both sides of the aisle acknowledged the injustices of politically motivated banking denials. Even Senator Elizabeth Warren, a known critic of cryptocurrencies, expressed concern over unfair debanking practices.
In a letter to President Trump, Warren signaled her intent to collaborate with Chairman Tim Scott and other congressional leaders to curb unjust banking restrictions. Her findings indicate that in the past three years, thousands of businesses faced unwarranted debanking, with four major banks—Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup—being responsible for over half of these cases.
Interestingly, Warren’s letter did not explicitly mention cryptocurrencies, hinting at a broader political strategy to address banking discrimination without fully endorsing the crypto industry.
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What Lies Ahead for Crypto Banking?
With the FDIC’s leadership realignment, regulatory policies toward cryptocurrency banking are poised for significant change. The agency has pledged to reassess its supervisory approach, particularly regarding crypto-related activities.
Chairman Travis Hill outlined plans to revoke the Financial Institution Letter (FIL) 16-2022, which mandated FDIC-supervised institutions to notify the agency before engaging in crypto-related activities. Past enforcement of this rule had effectively led to the widespread exclusion of crypto firms from banking services.
Additionally, the FDIC has committed to closer collaboration with the President’s Working Group on Digital Asset Markets. While maintaining a focus on financial safety and consumer protection, the agency’s new direction suggests a more balanced and transparent regulatory framework for the crypto industry.
Conclusion
The FDIC’s recent document release confirms long-standing concerns about targeted restrictions on cryptocurrency businesses. With bipartisan support emerging in the Senate and new leadership at the FDIC, there is optimism for a more equitable banking environment for crypto firms. As regulatory agencies reassess their strategies, the future of cryptocurrency banking in the U.S. may finally be on a path toward legitimacy and stability.
