- Senator Lummis warns FDIC over claims of destroying crypto-related documents linked to Operation Choke Point 2.0.
- Allegations surface about FDIC monitoring staff to prevent leaks tied to anti-crypto banking practices.
- The Trump team plans to reform banking by merging FDIC with other agencies and shifting insurance to the Treasury.
Cynthia Lummis has raised concerns over the alleged conduct of the Federal Deposit Insurance Corporation. The agency has been accused by whistleblowers of destroying materials relating to the ‘Operation Choke Point 2.0’. This initiative allegedly aimed to restrict banking access for crypto businesses.
In a letter addressed to FDIC Chair Marty Gruenberg on January 16, 2025, Lummis demanded immediate action to preserve all related documents. She warned that obstructing Senate oversight is both illegal and unacceptable. The letter also referenced allegations that FDIC staff access to these materials is being monitored to prevent leaks.
Potential Legal Implications for the FDIC
The pro crypto senator has warned the FDIC against punishing whistleblowers. In addition, the destruction of evidence could subject its recipient to criminal referrals to the Department of Justice.
The agency, they say, has used threats and legal efforts to suppress critical disclosures and stifle whistleblowers. The allegations have intensified scrutiny of the FDIC’s practices and its apparent role in the alleged anti crypto campaign.
Trump Administration’s Banking Overhaul Plans
The controversy raises as President-elect Donald Trump’s advisory team reportedly probes a significant shake-up of the banking sector. Possible changes include getting rid of the FDIC and putting its duties in the hands of the Office of the Comptroller of the Currency (OCC) and the Federal Reserve’s non monetary functions.
Deposit insurance responsibilities could shift to the Treasury Department. These discussions underscore the administration’s broader efforts to streamline financial regulation.
Crypto Industry Closures Under Investigation
Other closures have tied Signature Bank and Silvergate Bank to the FDIC’s involvement. They were both established crypto banks with strong crypto industry ties and were important players for the digital asset businesses. Their wind-downs are central to investigations into the broader crackdown on the crypto sector.
Pro-Crypto Policies Shape the Administration’s Stance
Trump’s Treasury nominee, Scott Bessent, has urged against creating a U.S. central bank digital currency (CBDC). He claimed the U.S. dollar already is a secure investment option. This stance aligns with the administration’s preference for decentralized systems and support for Bitcoin mining.
Despite support from the pro-crypto community, Bessent faced scrutiny during his confirmation hearing. Senator Elizabeth Warren raised questions about his views on crypto regulation and stablecoin oversight, highlighting concerns over potential risks.
