FDIC’s Lack of Transparency on Operation Chokepoint 2.0

In a recent statement, Coinbase’s Chief Legal Officer, Paul Grewal, has raised serious concerns regarding the Federal Deposit Insurance Corporation’s (FDIC) transparency—or lack thereof—surrounding Operation Chokepoint 2.0. This initiative, which took place during the Biden administration, allegedly targeted cryptocurrency and tech founders, denying them essential banking services. The situation has sparked a heated debate among industry experts and advocates for transparency in government operations.

Understanding Operation Chokepoint 2.0

Operation Chokepoint 2.0 refers to a controversial period when various U.S. government agencies were accused of systematically restricting access to banking services for cryptocurrency firms. This crackdown intensified following the collapse of several crypto-friendly banks in early 2023, leading to heightened scrutiny and allegations of government overreach. Critics, including venture capitalist Nic Carter, have described these actions as a deliberate effort to stifle innovation within the cryptocurrency sector.

Coinbase’s Call for Transparency

In a post on X dated March 8, Grewal emphasized that the FDIC continues to resist basic transparency efforts. Coinbase has formally requested that the FDIC disclose how it conducted its due diligence to ensure that no documentation related to Operation Chokepoint 2.0 was destroyed. However, the agency has repeatedly refused to comply with this request, raising further questions about its commitment to transparency.

Grewal’s comments come on the heels of a significant regulatory shift. Just hours after U.S. President Donald eased restrictions on how banks can engage with cryptocurrency, the Office of the Comptroller of the Currency (OCC) announced a more lenient stance. This shift could signal a turning point in the ongoing struggle for crypto firms to gain access to essential banking services.

Heavy Redactions and Lack of Clarity

Grewal revealed that the FDIC has redacted a total of 53 pages of documents related to Operation Chokepoint 2.0, with many other pages containing extensive redactions that render the documents nearly unintelligible. This lack of clarity only adds to the frustration felt by those in the cryptocurrency industry, who are seeking answers and accountability from government agencies.

Coinbase’s Investigation into SEC Actions

In addition to its concerns about the FDIC, Coinbase has also reached out to the Securities and Exchange Commission (SEC) to inquire about the number of investigations and enforcement actions taken against cryptocurrency firms between April 17, 2021, and January 20, 2025. This inquiry highlights the ongoing challenges faced by crypto companies in navigating a complex regulatory landscape.

Implications for the Future of Cryptocurrency

The executive order issued by the Biden administration, which excludes the U.S. Federal Reserve and FDIC from cryptocurrency working groups, may signal a shift in the government’s approach to the crypto industry. According to Caitlin Long, founder and CEO of Custodia Bank, this move could potentially put an end to previous efforts aimed at debanking the cryptocurrency sector.

As the cryptocurrency landscape continues to evolve, the need for transparency and accountability from government agencies becomes increasingly critical. The ongoing resistance from the FDIC raises important questions about the future of cryptocurrency in the United States and the role of regulatory bodies in shaping that future.

For more detailed information, you can read the original article here.