Whistleblower claims that the FDIC is destroying crypto-related documents have prompted U.S. Senator Cynthia Lummis to demand accountability and warn of potential legal action over alleged obstruction of Senate oversight.
Whistleblower Allegations
U.S. Senator Cynthia Lummis has accused the Federal Deposit Insurance Corporation (FDIC) of destroying documents linked to digital assets, citing whistleblower claims from within the agency. In a letter addressed to FDIC Chair Martin Gruenberg, the Wyoming Republican revealed that these whistleblowers were under strict surveillance by FDIC management to prevent information from reaching the Senate.
Legal Warnings Against FDIC
Lummis directed the agency to preserve all documents related to “digital asset activities,” including its supervision of Signature Bank and the liquidation of Silvergate Bank. Warning of legal repercussions, she stated:
“If it is uncovered that you or your staff have knowingly destroyed materials or sought to obstruct the oversight functions of the Senate, I will make swift criminal referrals to the US Department of Justice.”
Lummis’s demand for document preservation underscores her broader commitment to the cryptocurrency industry. She has been a vocal advocate for recognizing digital assets on a national scale. Last year, she introduced the Bitcoin Act, a proposal for the U.S. to establish a strategic Bitcoin reserve—a plan anticipated to gain approval under the incoming Trump administration.
Operation Choke Point 2.0
Lummis’s accusations reignite concerns over “Operation Choke Point 2.0,” a supposed government initiative aimed at limiting cryptocurrency’s integration with the banking sector. The program, which first came to light in 2024, was criticized for allegedly pressuring banks to sever ties with crypto firms hindering industry growth.
Previously, redacted FDIC letters revealed instructions to pause crypto-related activities in the banking sector. These revelations bolstered claims that regulators were deliberately marginalizing cryptocurrencies to prevent their adoption in traditional finance.
Calls for Transparency Amidst Debanking Concerns
Senator Lummis’s warning to the FDIC coincides with ongoing legal efforts to uncover the agency’s crypto-related practices. Coinbase CEO Brian Armstrong had previously filed a Freedom of Information Act (FOIA) request for FDIC communications urging banks to limit crypto activities. While the agency initially released heavily redacted letters, U.S. District Judge Ana Reyes ordered the FDIC to provide more complete documentation.
There has been a growing dissatisfaction within the crypto industry over debanking practices. Following an interview by Andreessen Horowitz co-founder Marc Andreessen on “The Joe Rogan Experience,” over 30 crypto founders shared similar experiences. Notable figures, including Frax Finance founder Sam Kazemian and Coinbase’s Armstrong, voiced frustrations over the financial sector’s treatment of crypto businesses.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
