U.S. Senator Cynthia Lummis (R-WY) has issued a scathing rebuke of the Federal Deposit Insurance Corporation (FDIC), alleging misconduct in the agency’s handling of digital asset oversight and threatening whistleblowers.
On Thursday, Lummis sent a letter to FDIC Chair Marty Gruenberg after whistleblowers alleged that the agency destroyed materials related to its crypto-related operations and threatened employees to silence them.
“The FDIC’s alleged actions are unacceptable and illegal,” Lummis wrote in her letter. The Senator has vowed to pursue the truth behind these allegations, calling for accountability from federal agencies involved in the oversight.
“The American people deserve transparency, and I will see to it that they get the answers they deserve,” Lummis wrote in a statement on Thursday.
The FDIC did not immediately respond to Decrypt’s request for comment.
The allegations center on “Operation Chokepoint 2.0,” a purported initiative to marginalize crypto firms by cutting off their access to banking services.
Whistleblowers reportedly told Lummis that the FDIC monitored staff access to sensitive materials to prevent Senate disclosures.
“The FDIC is attempting to hide Operation Chokepoint 2.0, and the FDIC must preserve all documents related to digital assets immediately,” Lummis wrote on X (formerly Twitter). “Tim Scott and I will get to the bottom of it.”
Tim Scott was sworn in as Senate Banking Committee chair after his predecessor, anti-crypto politician Sherrod Brown, lost to Bernie Moreno in the 2024 US. elections.
Lummis has instructed the FDIC to preserve all records related to its digital asset activities since January 2022 in her letter.
The senator detailed specific categories of documents to preserve, including communications about Signature Bank, Silvergate Bank, and crypto-related enforcement actions.
Lummis also demanded the preservation of all records tied to FDIC guidance and coordination with other federal banking agencies on digital assets.
The politician warned of criminal referrals to the Department of Justice if its found the FDIC “obstructed Senate oversight” and “knowingly destroyed materials.”
Operation Chokepoint 2.0: Allegations of Crypto Industry Targeting
Operation Chokepoint 2.0 mirrors an Obama-era undertaking, which targeted industries such as firearms dealers and payday lenders by pressuring banks to sever ties with these businesses.
Industry advocates claim this newer iteration focuses squarely on crypto, employing similar tactics to marginalize an entire sector through backdoor regulatory measures.
Last month, documents obtained via a Freedom of Information Act (FOIA) request by Coinbase revealed the FDIC directed banks to “pause all crypto asset-related activity” in 2022.
Crypto leaders such as Coinbase CEO Brian Armstrong and Custodia Bank CEO Caitlin Long have shared personal accounts of “debanking,” where financial services were abruptly withdrawn without reason.
Earlier this month, pro-crypto attorney John Deaton called Operation Chokepoint 2.0 a clear example of regulatory overreach driven by political motives rather than sound policy.
“This isn’t just a fight for crypto,” Deaton warned at the time. “It’s a fight against the erosion of institutional integrity and the unchecked power of unelected bureaucrats.”
Edited by Sebastian Sinclair
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