Cynthia Lummis Accuses FDIC of Destroying Operation Chokepoint 2.0 Records

Wyoming Senator Cynthia Lummis has issued a formal letter to Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg, expressing concerns following reports from whistleblowers within the agency.

According to the Republican legislator, her office was contacted by individuals alleging that the corporation was destroying documents tied to its digital asset activities.

The Alleged Activities

In her letter on Thursday, Lummis highlighted claims that suspected whistleblowers were being “closely monitored by management” as part of an effort to block communication with her office, with threats of legal action if staff members attempted to reach out.

She condemned the purported activities in a separate statement, saying:

“The FDIC’s alleged efforts to destroy and conceal materials from the U.S. Senate related to Operation Chokepoint 2.0 is not only unacceptable, it is illegal.”

The assertions revolve around “Operation Chokepoint 2.0,” an initiative ostensibly designed to hinder the crypto sector’s access to traditional banking and financial services.

Concerns over the approach of regulators to crypto-related banking surfaced prominently last year. In August, multiple crypto industry figures met with White House officials to discuss their relationship, including Mark Cuban and Anthony Scaramucci, as well as representatives from Coinbase, Kraken, and Uniswap.

During the meeting, Deputy Treasury Secretary Wally Adeyemo denied any coordinated attempt to block crypto from the financial system. However, when a participant asked who had experienced restricted banking access due to White House policies, nearly all attendees reportedly raised their hands.

Coinbase also sued the FDIC in June 2024, accusing it of attempting to sever crypto’s ties to traditional banking. However, the agency has denied targeting the industry. Its 2024 Risk Review report said that financial institutions are “neither prohibited nor discouraged from providing banking services to customers of any specific class or type.”

Senator Asks for Preservation of Crypto Records

In her message to Gruenberg, Lummis demanded that the regulator preserve all documents related to its digital asset activities since January 1, 2022. She detailed specific records to retain, including communications involving Signature Bank, Silvergate Bank, and crypto-related enforcement actions.

Additionally, she requested the preservation of guidance materials and records concerning the FDIC’s coordination with other federal agencies on digital assets.

The senator’s directive also called for safeguarding records containing terms such as “crypto,” “Bitcoin,” “Ethereum,” and “digital asset,” with an emphasis on protecting metadata and preventing the alteration or destruction of electronic information.

Further, the lawmaker warned that if anyone within the FDIC were found to have knowingly destroyed relevant materials or obstructed Senate oversight, swift criminal referrals would be made to the U.S. Department of Justice. Stressing the importance of transparency, Lummis pledged to ensure Americans receive the answers they deserve.