FDIC Accused of Destroying Crypto Documents, Senator Lummis Threatens Legal Action

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A whistleblower alleges that the Federal Deposit Insurance Corporation (FDIC) is discarding papers related to cryptocurrency, which has led U.S. Senator Cynthia Lummis to call for transparency and threaten possible legal consequences if the accusations of obstructing Senate scrutiny prove true.

Whistleblower Allegations  

U.S. Senator Cynthia Lummis has alleged that the Federal Deposit Insurance Corporation (FDIC) is destroying documents related to digital assets, based on reports from whistleblowers within the organization. In a letter sent to FDIC Chair Martin Gruenberg, the Wyoming Republican disclosed that these whistleblowers have been closely monitored by FDIC management in an attempt to prevent them from sharing information with the Senate.

Legal Warnings Against FDIC

Senator Lummis instructed the agency to safeguard all records pertaining to “digital asset operations,” encompassing their oversight of Signature Bank and the dissolution of Silvergate Bank. She cautioned about potential legal consequences while making this statement.

If evidence surfaces indicating that you or your team intentionally damaged documents or attempted to hinder the Senate’s investigative duties, I will promptly submit a report to the U.S. Department of Justice for potential criminal investigation.

As an analyst, I find it clear that Lummis’s insistence on document preservation reflects her strong dedication to the cryptocurrency sector. Consistently, she has taken a proactive stance in advocating for digital assets on a nationwide level. In fact, last year, she presented the Bitcoin Act, a proposal suggesting the U.S. should create a strategic Bitcoin reserve. This forward-thinking plan is expected to garner support under the incoming Trump administration.

Operation Choke Point 2.0 

Lummis’s criticisms spark renewed worries about “Operation Choke Point 2.0,” a rumored government plan that some claim is intended to restrict cryptocurrency from integrating with the banking system. This program, initially exposed in 2024, faced criticism for allegedly forcing banks to cut ties with crypto businesses, thereby stifling industry advancement.

Earlier findings from FDIC letters, which had been redacted, suggested that financial institutions were directed to halt activities involving cryptocurrencies within the banking sector. This information lends support to arguments suggesting that regulators are intentionally minimizing the role of cryptocurrencies in traditional finance to impede their integration.

Calls for Transparency Amidst Debanking Concerns 

Senator Lummis’s caution towards the Federal Deposit Insurance Corporation (FDIC) aligns with ongoing legal endeavors aimed at exposing the agency’s dealings in cryptocurrencies. Notably, Coinbase CEO Brian Armstrong submitted a Freedom of Information Act (FOIA) request for correspondence between the FDIC and banks regarding restrictions on crypto activities. Initially, the FDIC disclosed heavily censored letters; however, U.S. District Judge Ana Reyes has mandated that they reveal less redacted documentation.

There’s been increasing discontent among cryptocurrency professionals regarding banking practices. After an interview by Marc Andreessen, co-founder of Andreessen Horowitz, on “The Joe Rogan Experience,” more than 30 crypto entrepreneurs have spoken out about similar issues. Key figures like Sam Kazemian, founder of Frax Finance, and Brian Armstrong, CEO of Coinbase, have expressed concerns over how the traditional financial sector deals with crypto companies.

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2025-01-17 16:13