Lummis sparked industry outrage by citing whistleblower claims that the FDIC obliterated documents and suppressed staff during a crypto oversight investigation.
In a withering rebuke of the Federal Deposit Insurance Corporation (FDIC), U.S. Senator Cynthia Lummis (R-WY) has accused the agency of misconduct in its supervision of digital assets and has threatened whistleblowers.
Lummis wrote a letter to FDIC Chair Marty Gruenberg on Thursday in response to allegations by whistleblowers that the agency had obliterated materials related to its crypto-related operations and threatened employees in order to suppress them.
Lummis wrote in her letter that the FDIC’s purported actions are both unlawful and unacceptable. The senator has pledged to investigate the allegations and has demanded accountability from federal agencies that are involved in the supervision.
On Thursday, Lummis issued a statement stating that “the American people deserve transparency, and I will ensure that they receive the answers they deserve.”
The allegations pertain to “Operation Chokepoint 2.0,” which is a purported effort to restrict the access of crypto firms to banking services in order to marginalize them.
Lummis reports that whistleblowers informed him that the FDIC monitored staff access to confidential materials in order to prevent Senate disclosures.
Lummis wrote on X (formerly Twitter) that “the FDIC is attempting to conceal Operation Chokepoint 2.0 and that the FDIC must promptly preserve all documents related to digital assets. Tim Scott and I will investigate the matter.”
After Sherrod Brown, an anti-crypto politician, was defeated by Bernie Moreno in the 2024 US elections, Tim Scott was sworn in as the head of the Senate Banking Committee.
Lummis has directed the FDIC to maintain all records concerning its digital asset activities since January 2022 in her letter.
Communication regarding Silvergate Bank, Signature Bank, and crypto-related enforcement actions were among the categories of documents that the senator specified for preservation.
Lummis also requested the preservation of all records associated with FDIC guidance and the establishment of a collaborative effort with other federal banking agencies regarding digital assets.
The politician issued a cautionary note regarding criminal referrals to the Department of Justice in the event that it is determined that the FDIC “obstructed Senate oversight” and “knowingly destroyed materials.”
Operation Chokepoint 2.0 is reminiscent of an Obama-era initiative that aimed to isolate industries like payday lenders and firearms dealers by compelling banks to terminate their relationships with these entities.
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