In a significant development for the cryptocurrency industry, the Federal Deposit Insurance Corporation (FDIC) has released 790 pages of internal documents revealing a pattern of systematic resistance to banks seeking to offer cryptocurrency services. The documents, made public following Freedom of Information Act (FOIA) requests by Coinbase, provide unprecedented insight into the federal regulator’s approach to digital asset banking between 2022 and 2024.
The extensive document release shows that banking institutions seeking to integrate cryptocurrency services faced substantial regulatory hurdles, including prolonged delays, intensified scrutiny, and “pause letters” that effectively halted their initiatives. According to FDIC Acting Chairman Travis Hill, the agency issued 25 such pause letters to 24 different institutions, creating what he acknowledged as an “extraordinarily difficult — if not impossible” environment for banks to proceed with crypto-related activities.
“Both individually and collectively, these and other actions sent the message to banks that it would be extraordinarily difficult to move forward,” Hill stated in an accompanying statement. “As a result, the vast majority of banks simply stopped trying.”
The path to this disclosure began in October 2024, when Coinbase filed two FOIA requests seeking information about what has been termed “Operation Choke Point 2.0,” referring to alleged coordinated efforts to restrict cryptocurrency firms’ access to banking services. One specific focus of the requests was to investigate whether the FDIC had implemented a 15% cap on bank deposits from crypto-related companies.
The document release process has been marked by legal intervention and controversy. In December 2024, an initial set of documents was released with extensive redactions, prompting U.S. District Judge Ana Reyes to criticize the FDIC’s approach. In a strongly worded December 12 ruling, Judge Reyes stated that the agency “cannot simply blanket redact everything that is not an article or preposition” and characterized the heavy redactions as demonstrating a “lack of good-faith effort” in fulfilling its disclosure obligations.
The situation has drawn significant political attention, particularly from Senator Cynthia Lummis of Wyoming, who in January 2025 raised serious concerns about potential document destruction related to Operation Choke Point 2.0. Lummis issued a directive to the FDIC to preserve all records concerning digital asset activities from 2022 onward, warning that any evidence of document destruction would result in criminal referrals to the Department of Justice.
In response to the mounting pressure and scrutiny, the FDIC appears to be signaling a shift in its regulatory stance. Acting Chairman Hill announced that the agency is “actively reevaluating our supervisory approach to crypto-related activities” and has committed to working with the President’s Working Group on Digital Asset Markets. He has also directed FDIC staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services.
The newly released documents provide detailed evidence of the regulatory challenges faced by banks interested in cryptocurrency services. Banks encountered repeated requests for additional information and were subjected to extended review periods, with many applications effectively stalled or denied. This pattern of regulatory resistance has raised concerns about whether federal regulators deliberately implemented policies to discourage traditional banking institutions from engaging with the cryptocurrency sector.
The revelations come at a critical time for the cryptocurrency industry, which has long sought greater integration with traditional banking systems. The documents suggest that regulatory resistance may have played a more significant role in limiting this integration than previously known, potentially affecting the industry’s development and mainstream adoption.
Looking ahead, the FDIC’s apparent shift in approach could signal a new chapter in the relationship between traditional banking and cryptocurrency services. However, with continued congressional oversight and ongoing investigations into past practices, the agency’s handling of crypto-related banking activities is likely to remain under intense scrutiny.
The Senate Banking Committee is scheduled to hold hearings on alleged “debanking” practices, where these documents and the FDIC’s past approach to cryptocurrency services are expected to be key topics of discussion. The outcome of these hearings, combined with the FDIC’s promised reevaluation of its supervisory approach, could have significant implications for the future of cryptocurrency integration in the U.S. banking system.
This ongoing situation highlights the complex relationship between traditional financial regulators and the emerging cryptocurrency sector, as well as the challenges of adapting regulatory frameworks to accommodate new financial technologies while maintaining appropriate oversight and risk management.
