FDIC’s Crypto Drama: 175 Docs and a Congressional Circus! 🎪💰

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Ah, the Federal Deposit Insurance Corporation, that venerable institution, has decided to grace us with a veritable treasure trove of 175 documents concerning its oversight of banks dabbling in the mysterious world of crypto. This release, timed with the precision of a Swiss watch, coincides with a court-ordered deadline and an impending congressional hearing that promises to be as riveting as watching paint dry.

In a recent press statement, the FDIC has unveiled these documents, which detail its supervision of banks that dared to engage in or even contemplate crypto-related activities. The revelations are as delightful as a cold cup of tea, showcasing a pattern of resistance from regulators. Banks, it seems, have been met with delays longer than a Russian winter, repeated requests for more information, and directives to pause their blockchain dreams. Who knew that banking could be so thrilling? 😏

Acting FDIC Chairman Travis Hill, in a moment of transparency that would make even the most seasoned politician blush, declared that this decision would enhance clarity. One can only assume he meant clarity in the sense of a foggy day in London. The FDIC had previously disclosed a mere 25 “pause” letters sent to 24 institutions, but now, with great fanfare, they have added more correspondence, like a magician pulling rabbits out of a hat.

“The documents we are releasing today show that requests from these banks were almost universally met with resistance, ranging from repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity.”

As if the drama couldn’t get any juicier, this document release comes just before a congressional hearing on banking practices and financial access. The hearing is expected to focus on the FDIC’s previous supervisory approach to crypto-related activities, which, let’s be honest, has been about as effective as a screen door on a submarine.

Senator Cynthia Lummis, in a moment of uncharacteristic enthusiasm, applauded the FDIC’s move, emphasizing the importance of government transparency. She expressed her gratitude to Chairman Hill and the administration for making these documents available, as if they had just discovered the cure for boredom.

I am thrilled the FDIC acted swiftly & efficiently to release these documents. I want to thank Chairman Hill and @POTUS for your commitment to government transparency! We are putting an END to Chokepoint 2.0.

— Senator Cynthia Lummis (@SenLummis) February 5, 2025

Earlier, our dear Senator Lummis had warned former Chair Marty Gruenberg against obstructing Senate oversight, demanding the FDIC preserve all documents tied to OCP 2.0. She even cautioned against retaliation toward whistleblowers, citing potential criminal referrals. Because nothing says “I care” like a good old-fashioned threat, right?

In response to the concerns raised by these documents, the FDIC has announced plans to reassess its approach to crypto-related activities. This includes replacing Financial Institution Letter (FIL) 16-2022, a guidance document that has been as helpful as a chocolate teapot in engaging with blockchain technology.

Moreover, the FDIC intends to collaborate with the President’s Working Group on Digital Asset Markets, established by a recent executive order. They aim to develop a regulatory framework that allows institutions to engage in crypto-related activities while adhering to safety principles. Because who doesn’t love a good set of rules to follow?

Under the previous administration, the Federal Deposit Insurance Corporation faced a barrage of criticism for Chokepoint 2.0. Coinbase CLO Paul Grewal accused the agency of attempting to “kill BTC transactions” and suppress blockchain technology. He claimed FDIC officials hid key evidence in the FOIA case and misused Exemption 8 to cover their tracks. Ah, the sweet smell of bureaucracy! 🍵

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2025-02-05 21:42