Despite mounting evidence of an apparent crackdown, the FDIC is finally admitting what crypto insiders have known for months: banks seeking to offer crypto services faced a regulatory brick wall.
The federal agency recently released 175 documents showing how they systematically stonewalled financial institutions curious about crypto. They sent 25 “pause” letters to 24 different banks. Message received, loud and clear.
The pushback was so obvious that Acting Chairman Travis Hill couldn’t deny it. He acknowledged banks faced a “difficult” path—talk about understatement of the year. Banks that dared show interest in blockchain were met with delays, resistance, and bureaucratic red tape. No wonder most gave up.
Even regulators admit the truth now—show interest in crypto, face a bureaucratic maze designed to exhaust your patience.
Now Congress wants answers. House Oversight Committee Chairman James Comer is demanding unredacted documents from the FDIC. Critics aren’t mincing words, dubbing the agency’s actions “Operation Choke Point 2.0″—a not-so-subtle reference to the Obama-era program targeting legal but disfavored industries.
The impact? Devastating. Crypto companies couldn’t get basic banking services. Even crypto founders reportedly faced personal account closures. Banks that initially showed enthusiasm for digital assets quickly backed off. Who wants to anger their regulator?
The FDIC claims they were just being cautious. Fair enough, given the industry’s string of bankruptcies and scandals. But there’s a difference between caution and obstruction.
Under pressure, things are changing. Coinbase sued through FOIA, forcing the FDIC to release 790 pages of documents. The Senate Banking Committee held a hearing on alleged debanking that coincided with the FDIC document release. The agency published redacted pause letters and is “reevaluating” its approach under new leadership.
Hill now promises a pathway for crypto activities. Better late than never. The question is whether it’s a genuine shift or just damage control.
With multiple agencies under scrutiny—including the SEC’s changing stance—2023 might finally bring clarity for crypto banking.
Banks and regulators alike are studying how to balance innovation with safety. This investigation, announced on February 28, seeks to determine whether political motives influenced the FDIC’s delayed implementation of proper crypto oversight. After years in regulatory purgatory, crypto might finally get its banking day in the sun.
