On February 5, 2025, the Federal Deposit Insurance Corporation released 175 documents from the Biden-era FDIC news agency ahead of the US Senate Banking Committee’s GOP hearing on the departure of crypto companies. The new document reveals new details of what is called “Operation Chalk Point 2.0.”
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Following Trump’s inauguration, the Procrypt team took over the FDIC and sided with Coinbase in the fight against alleged obstruction of companies working with cryptocurrency.
In 2024, Coinbase sued the FDIC. This move allowed us to use the Freedom of Information Act to force institutions to release some of their communications with financial institutions. FDIC has released some heavily edited documents now known as “suspension characters.”
read more: Coinbase Clo: FDIC was trying to hide its actions aimed at debanking cryptographic clients
These letters showed that FDIC was effectively stripping financial institutions of the right to use cryptocurrency to suspend all businesses of the company and use banking services without appropriate reasons. . The practice solidified the growing concerns about the ongoing “Operation Chalk Point 2.0” under the democratic administration.
The new FDIC team was critical of its predecessor and voluntarily released new documents regardless of Coinbase’s exercise of FOIA.
What’s in a new FDIC-enabled batch
Another 175 documents from the FDIC have been compiled for release after reviews made under Travis Hill, a new chair. The release date coincides with the start of a Senate hearing entitled “Investigating the Real Impact of Escape in America.” This document may serve as additional evidence of the Biden-era FDIC’s efforts to block cryptocurrency companies from banking services.
The newly released document revealed that FDIC has forced more companies to denounce crypto clients. The bank’s efforts to resist or ask additional questions were filled with silence from the FDIC, which could last for months. In some cases, FDIC has sent an order to suspend or refrain from all encryption or blockchain-related activities.
Acting and voiced by Paul Grewal’s Coinbase Clo, who worked and voiced in the fight against Crypto’s client, took X to demonstrate and comment on some excerpts from published documents. He compared FDIC actions to practice and called them “restrictions due to fatigue.”
One bank had allowed the purchase of BTC, but @FDICGOV paused the expansion, and then the exam effectively killed everything. pic.twitter.com/khrypnvuis
– Paulgrewal.eth (@iampaulgrewal) February 5, 2025
The document shows that if the bank and FDIC signed an agreement to restrict services for crypto clients, the company made an effort to cancel such agreements and achieve broader restrictions.
The FDIC is hoping that, despite all efforts to convince financial institutions of the security and soundness of such transactions, banks will suppress the banks from supporting clients involved in crypto transactions. They matched. Judging by available documents, the banks have lost this battle, shutting down all of their businesses in crypto companies. Refusing to do crypto transactions did not mean that the client was regaining banking services.
This is particularly interesting. April 2022 @FDICGOV Internal Notes explains information that explains what I learned from a meeting with the bank in March 2022. It shows that the bank is performing due diligence and that the customer’s BTC is not on pic.twitter. com/ytblgawgpq
– Paulgrewal.eth (@iampaulgrewal) February 5, 2025
FDIC cited reputational risk, crypto volatility, and consumer protection as reasons to deny some clients the right to use the bank.
An unexpected friend
At the Feb. 5 hearing, both Democrats and Republicans agreed that the incident they investigated saw an unfair denial of the banking business on political grounds. Surprisingly, even Sen. Elizabeth Warren, often considered the complete enemy of cryptocurrency, intervened to investigate unfair desertion and take action.
Warren wrote to President Trump, where she expressed her desire to work with the president, Chairman Tim Scott and Congress, and stopped stripping the bill. In the letter, she shares some of her findings. Her analysis shows that there have been thousands of unfair decutting in three years, with over half of the complaints linked to four banks, Bank of America, JPMorgan Chase, Wells Fargo and Citigroup.
Her letter shows that she doesn’t mention cryptocurrency at all. This means that while Warren has not explicitly expressed her attitude towards cryptocurrency, she is using the crypto community agenda.
What’s next?
As the FDIC and the government become Coinbase ally, the previous anti-cryptic operations of FDIC iterations will likely cease. Bipartisan hostility towards the removal initiative is a strong signal of change.
Based on the press release, we can imagine an approximate image of the future relationship between FDIC and the crypto industry. According to Travis Hill, the FDIC will “reevaluate” “their supervisory approach to crypto-related activities.” It contains a few points. First, the company will replace the Financial Institution Letter (FIL) 16-2022. This letter requires that all FDIC overseen agencies be notified of their involvement in cryptocurrency activities and provide information for review. As can be seen now, according to these reviews, banks are forced to halt cooperation with crypto clients.
FDIC will work closely with the CEO’s working group on the digital asset market. Hill emphasizes that FDIC will continue to adhere to the principles of safety and health.
You might like it too: FDIC releases documentation related to cryptographic decanking
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