The Federal Deposit Insurance Corporation (FDIC) is under scrutiny for withholding information about its role in what has been termed Operation Chokepoint 2.0.
The Federal Deposit Insurance Corporation (FDIC) is under scrutiny for withholding information about its role in what has been termed Operation Chokepoint 2.0, a crackdown that allegedly led to crypto and tech founders being denied banking services during the Biden administration. Coinbase’s chief legal officer, Paul Grewal, accused the agency of resisting transparency, stating that it has refused to provide documentation on whether any records related to the operation were destroyed. In a March 8 post on X, Grewal said the FDIC produced only “snippets” of documents with little relevance and redacted 53 pages, leaving many unintelligible. Coinbase has called on lawmakers to investigate the agency’s actions.
The operation, which reportedly resulted in at least 30 tech and crypto founders being “secretly debanked,” has been criticized as an effort to pressure financial institutions into severing ties with the crypto industry. The collapse of crypto-friendly banks in early 2023 added to suspicions of a coordinated effort against the sector. Despite ongoing requests, the FDIC has refused to give sworn testimony or provide full documentation about its involvement. In a Feb. 12 court filing, Coinbase asked for a suspension of the period granted to the FDIC to respond to an amended complaint and urged the court to compel the agency to provide complete records.
Coinbase has also sought information from the SEC regarding enforcement actions against crypto firms, filing a FOIA request on March 4 to obtain records from April 2021 to January 2025. The move comes as regulatory attitudes toward crypto shift. Trump had previously signed an executive order aimed at easing banking restrictions for Web3 companies, which excluded the FDIC and Federal Reserve from cryptocurrency working groups. Caitlin Long, CEO of Custodia Bank, has argued that this could mark the end of efforts to cut crypto firms off from banking services.
During the White House Crypto Summit, Trump vowed to end Operation Chokepoint 2.0 and criticized the Biden administration’s handling of crypto regulations. His announcement was followed by the Office of the Comptroller of the Currency (OCC) updating its policies, allowing banks greater autonomy in deciding whether to work with crypto firms. The new guidelines remove the requirement that banks obtain pre-approval before offering services such as custody, stablecoin payments, or distributed ledger transactions. Acting Comptroller of the Currency Rodney E. Hood said the change ensures that banks apply the same risk management standards to crypto activities as they do to traditional banking.
Despite these regulatory shifts, Coinbase’s legal fight with the FDIC continues, with Grewal arguing that the agency’s refusal to provide full transparency raises serious concerns about its conduct. The crypto industry is now watching closely to see if these policy changes will put an end to targeted debanking efforts or if the lack of transparency from regulators will continue.
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