FDIC Sends Intimidating Letters to Banks Regarding Crypto Activities
Stuart Alderoty, chief legal officer at Ripple, has expressed his concerns about the Federal Deposit Insurance Corporation (FDIC) sending “shockwaves” throughout various banks with their recent intimidating letters.
In a social media post, Alderoty, a former bank general counsel, stated that the letters from the FDIC were sending a clear message to shut down all crypto-related activities immediately.
The issue came to light after cryptocurrency exchange Coinbase obtained unredacted copies of letters sent by the FDIC to numerous banks, prompting allegations of a coordinated effort to curtail a wide range of crypto transactions, including basic Bitcoin transactions.
Operation Choke Point 2.0 and Allegations of Targeting Crypto Industry
According to Paul Grewal, chief legal officer at Coinbase, the recently disclosed letters support claims within the crypto industry about an initiative known as “Operation Choke Point 2.0.” This alleged crackdown on crypto activities bears resemblance to the original Operation Chokepoint, which faced backlash for unfairly targeting certain industries without due process.
Crypto advocates argue that the FDIC’s actions are part of a broader effort to suppress the growth of the cryptocurrency industry.
Call for Congressional Investigation
Alderoty and Grewal have called on Congress to launch an investigation into the FDIC’s actions. Grewal emphasized the need for hearings to address the alleged crackdown on crypto activities and ensure transparency in regulatory actions.
The origins of this anti-crypto initiative are believed to stem from regulatory demands by the Office of the Comptroller of the Currency (OCC) in 2021, followed by the FDIC’s involvement in 2022.