The Federal Deposit Insurance Corporation (FDIC) attempted to cover up its actions toward Debank Crypto customers

On January 6, 2025, Paul Grewal, CLO at Coinbase, went to According to Grewal, the FDIC abused Exemption 8 of the FOIA in an attempt to suppress court-mandated information.

Coinbase File a lawsuit against Federal Deposit Insurance Corporation to enforce the Freedom of Information Act. Initially, the application was denied by the Federal Deposit Insurance Corporation (FDIC). According to Grewal, the Federal Deposit Insurance Corporation failed to submit all court-mandated documents in a timely manner and only added more documents after additional legal pressure. What’s more, the FDIC used Exemption 8 from the Freedom of Information Act (FOIA) to significantly alter data. Documents revealed (so-called “pause letters” addressed to financial institutions) without a legally justified reason.

Exemption 8 The Freedom of Information Act was designed to protect matters “involving or relating to examination, operating or condition reports prepared by, on behalf of or for the use of an agency responsible for regulating or supervising financial institutions.”

Why did the FDIC redact the documents?

The excuse for concealing some details in the disclosed documents was that revealing this information would have caused “reasonably foreseeable harm” to the recipients of these letters. It is alleged that the names of the institutions, specific operations, and other details, if made public, would damage relations between the banks involved and the regulator (i.e., the FDIC). Interestingly, the letters were not confidential until September 2022, when the FDIC began adding notices that banks must keep the letters secret.

Some information was initially redacted became available On January 4th. Grewal claims that the newly disclosed data does not harm the recipients of the pause letters and that the FDIC made up the excuse to cover up the ongoing Operation Choke Point 2.0, the colloquial name for the series of efforts by the FDIC, the Federal Reserve, and institutions. Others are to block services for customers conducting transactions related to cryptocurrencies, religious groups, customers associated with African countries, and other law-abiding customer groups.

Senator and former Attorney General John E. Deaton expressed his support for efforts to stop Operation Choke Point 2.0 and stated that he is eager to lead an investigation against the officials involved pro bono.

In X’s post, Deaton emphasizes the importance of Choke Point 2.0 in the ongoing case against Ripple. He warns that the precedent of “unelected bureaucrats…arbitrarily denying access to basic financial infrastructure” goes far beyond the cryptocurrency sector.

Summary of “Pause Messages”.

The letters sent by the Federal Deposit Insurance Corporation (FDIC) to financial institutions aim to prevent banks from providing services to customers related to cryptocurrency activity. The letters indicated that services might only be provided after advice from the regulator, but it is not known whether this advice was ever given. In most cases, customers were left without consistent explanations about the reasons for service discontinuation. In several cases, banks have admitted that they blocked accounts due to “unexpected activity” or things like that.

the 25 exposed messages They were sent between 2022 and 2023. The types of activities that financial institutions were urged to halt for an indefinite period included:

• Bitcoin-backed lending operations
• NFTs and storage of cryptocurrencies by banks
• Rehabilitation of decentralized “ecosystems”.
• Products that allow customers to buy or sell cryptocurrencies
• Private and public blockchain settlement networks
• Issuance of stablecoins allowed
• Stablecoin repositories
• Issuing debit cards that support cashback in Bitcoin

Other well-known cases include blocking of cryptocurrency hedge fund accounts.

Another 2022 document issued by the Federal Deposit Insurance Corporation (FDIC) is Internal memoFDIC-supervised banks that will launch their cryptocurrency-related products are required to notify the FDIC Regional Administrator in advance and provide all necessary information for examination.

Is Operation Choke Point 2.0 real?

There are several accounts of cases where banks stopped providing services to customers related to cryptocurrencies. If this is not enough to confirm the existence of the transaction, we can add FDIC letters. Although it does not necessarily urge banks to completely close customer accounts, it has created problems by blocking accounts indefinitely, creating uncertainty for US entrepreneurs in the cryptocurrency sector. If one doubts that Operation Choke Point 2.0 is real, we might state that the FDIC’s recommendations to close the bank accounts of companies that do not violate the law are infinitely real.

Activists writing about Operation Choke Point 2.0 claim that the FDIC is engaged in a secret disinformation campaign initiated against them.