U.S. Senator Cynthia Lummis (R-WY) has issued a scathing rebuke to the Federal Deposit Insurance Corporation (FDIC), alleging misconduct in the agency’s handling of digital asset oversight and threatening whistleblowers.
On Thursday, Lummis sent a letter to FDIC Chairman Marty Gruenberg after whistleblowers alleged the agency destroyed materials related to its crypto-related activities and threatened employees to silence them.
“The FDIC’s alleged actions are unacceptable and illegal,” Lummis wrote in her message letter. The senator has vowed to uncover the truth behind these allegations and has called for accountability from federal agencies involved in the surveillance.
“The American people deserve transparency, and I will make sure they get the answers they deserve,” Lummis wrote in an interview statement on Thursday.
The FDIC did not immediately respond Declutter request for comment.
The allegations focus on “Operation Chokepoint 2.0”, an alleged initiative to marginalize crypto companies by cutting off their access to banking services.
Whistleblowers reportedly told Lummis that the FDIC controlled staff access to sensitive materials to prevent Senate disclosures.
“The FDIC is attempting to cover up Operation Chokepoint 2.0, and the FDIC must immediately retain all documents related to digital assets,” Lummis said wrote on X (formerly Twitter). “Tim Scott and I will get to the bottom of it.”
Tim Scott was sworn in as chairman of the Senate Banking Committee, following his predecessor, anti-crypto politician Sherrod Brown, lost to Bernie Moreno in the 2024 US elections.
Lummis, in its letter, directed the FDIC to retain all records related to its digital asset activities since January 2022.
The senator detailed specific categories of documents that should be retained, including communications about Signature Bank, Silvergate Bank and crypto-related enforcement actions.
Lummis also demanded the preservation of all data related to FDIC guidelines and coordination with other federal banking agencies on digital assets.
The politician warned of criminal referrals to the Justice Department if it found that the FDIC “obstructed Senate oversight” and “knowingly destroyed materials.”
Operation Chokepoint 2.0: Allegations of targeting the crypto industry
Operation Chokepoint 2.0 echoes an Obama-era venture that targeted industries such as firearms dealers and lenders by pressuring banks to cut ties with these companies.
Industry advocates claim that this newer iteration focuses squarely on crypto, using similar tactics to marginalize an entire sector through backdoor measures.
Last month, documents obtained via a Freedom of Information Act (FOIA) request from Coinbase revealed that the FDIC ordered banks to “pause all crypto asset-related activities” in 2022.
Crypto leaders like Coinbase CEO Brian Armstrong and Custodia Bank CEO Caitlin Long have done just that shared personal accounts of ‘debanking’, where financial services were stopped abruptly and without reason.
Earlier this month, pro-crypto advocate John Deaton called Operation Chokepoint 2.0 is a clear example of overreaching regulation, driven by political motives rather than sound policy.
“This isn’t just a fight over crypto,” Deaton warned at the time. “It is a fight against the erosion of institutional integrity and the unchecked power of unelected bureaucrats.”
Edited by Sebastian Sinclair
Daily debriefing Newsletter
Start every day with today’s top news stories, plus original articles, a podcast, videos and more.