The U.S. Federal Deposit Insurance Corporation (FDIC) continues to “resist” transparency efforts regarding alleged past attempts to quash the crypto sector, according to Coinbase chief legal officer Paul Grewal.

Grewal references “Operation Choke Point 2.0,” an alleged attempt by the Biden Administration government regulators to stifle the crypto industry.

Coinbase has been using the Freedom of Information Act (FOIA) to uncover instances of the FDIC asking banks to freeze crypto services, known as “pause letters,” but Grewal says they are not fully complying.

The exchange hired the law firm History Associates, which filed a motion in January asking a federal court to intervene.

Explains Grewal,

“One of our requests concerns FDIC’s representation in a hearing before the Court that the agency had conducted “due diligence” to ensure that no documents were destroyed. We asked FDIC to describe what example that due diligence was. But FDIC has repeatedly refused to do so, and now takes umbrage at the request to explain the basis of its assertion to the Court.

In response to our requests for FDIC guidance or policies on processing FOIA requests—directly relevant to our policy-or-practice claims—the agency has produced only snippets from a few documents that have little to nothing to do with the specific FOIA policies or practices that History Associates has challenged in its amended complaint. What exactly are they hiding?”

Last month, the FDIC released redacted documents related to its supervision of crypto-related activities, which include pause letters sent to 24 banks as well as communications and records involving other regulated institutions.

House Oversight Committee Chairman James Comer (R-KY) subsequently sent a letter to FDIC Acting Chairman Travis Hill requesting unredacted copies of the documents.

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A top US regulator’s recent easing of its stance on crypto doesn’t mean that the US government’s crusade against the industry is over, according to Custodia Bank CEO Caitlin Long.

Late last week, the Office of the Comptroller of the Currency (OCC) announced that banks in the US could now go ahead with a range of crypto services, including custody and certain stablecoin activities.

Said Acting Comptroller of the Currency Rodney E. Hood,

“Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”

However, Long says that Operation Choke Point 2.0 – a term commonly used to describe the US government’s covert agenda to stifle the crypto industry – isn’t over unless two other US regulators abandon their unfriendly stance on digital assets.

Last December, a Freedom of Information Act (FOIA) request by the crypto exchange Coinbase found dozens of instances where the Federal Deposit Insurance Corporation (FDIC) asked banks to freeze crypto-related services.

Long also calls upon the Fed to allow Custodia – a prominent digital asset custody bank – to have a master account, or a bank account that financial institutions hold directly with the Federal Reserve.

Says Long,

“AMID ALL THE JUBILATION ABOUT the OCC news, Operation Choke Point 2.0 (OCP 2.0) isn’t over until:
1. Fed and FDIC also rescind their anti-crypto guidance, which is still in effect (Fed & FDIC were far more detrimental to crypto banking than OCC) and

2. Custodia Bank has its Fed master account.

Context: banks that wanted to serve crypto but got regulatory pressure not to (OCP 2.0) were mostly Fed and FDIC-regulated banks, not OCC-regulated. OCC’s move is a big positive an has implications on the other two agencies, but FDIC and Fed anti-crypto guidance is still in effect.“

The House Committee on Oversight and Government Reform recently requested access to unredacted documents from the FDIC to investigate allegations that banks were deliberately de-banking the crypto industry.

The FDIC has not formally answered the request.

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