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Wyoming Senator Cynthia Lummis has sent a cautionary letter to US authorities regarding her concerns regarding the FDIC’s conduct, alleging misconduct tied to “Operation Choke Point 2.0.”
In the letter, Sen. Cynthia Lummis alleges that FDIC has reportedly been destroying critical documents associated with the operation amidst alleged plans to deny banking access to crypto businesses.
Lummis Claims Whistleblowers Threatened
The January 16 letter addressed to FDIC Chair Marty Gruenberg demands an immediate cessation of tampering with the sensitive documents. The senator categorically stated she would institute criminal charges against the Department of Justice against any staff members found obstructing the Senate’s oversight obligations or tampering with evidence. It has been alleged that Gruenberg has announced his resignation, which could add another layer of urgency to the situation.
According to Senator Cynthia Lummis, whistleblowers working with the FDIC let the cat out of the bag. This includes allegations of deliberately withholding information from policymakers amidst threats to employees who tried to share the materials with the Senate.
Lummis warned:
“This is illegal and unacceptable. You are directed to ensure your staff cease and desist destruction of all materials and end all retaliatory actions immediately.”
FDIC Accused of Acting in Bad Faith
The controversy surrounding Operation Choke Point 2.0 has been a serious legal thorn in the flesh of prominent cryptocurrency industry operatives. For example, the cryptocurrency exchange Coinbase filed a lawsuit against FDIC and demanded access to critical documents like the so-called “pause letter.” The document allegedly contains instructions asking financial institutions to stop offering banking services to crypto-based businesses.
According to Coinbase, the judge ordered the FDIC to release the required letter, but the exchange reported that the version they were given access to was heavily redacted. Coinbase returned to court, where a second declaration was given, accusing the FDIC of acting in bad faith and ordering the agency to fully disclose. Commenting on the issue of the release of the letters, Coinbase’s chief legal officer, Paul Grewal, accused the FDIC of cover-up.
Threat of Criminal Referrals
The directive by Sen. Cynthia Lummis involves records dating back to 2022. The materials in question relate to the agency’s supervision of cryptocurrencies, enforcement actions, and inter-agency communications. The Wyoming Senator has clarified that any attempt to destroy evidence would lead to swift legal action. Her letter states:
“If it is uncovered that you or your staff have knowingly destroyed materials or sought to obstruct the oversight functions of the Senate, it will result in swift criminal referrals to the US Department of Justice.”
Critics have likened Operation Chokepoint 2.0 to the Obama-era undertaking that targeted payday lenders and firearms industries and pressured banks to cut ties with them entirely or deny them services. The crypto industry players claim the new dispensation has squarely focused on the crypto industry and deliberately tried to marginalize the entire sector using backdoor measures.
Conclusion
Operation Choke Point 2.0 is the latest flashpoint in the clash between government agencies and the dynamic cryptocurrency industry. The alleged destruction of documents by the FDIC and threats against whistleblowers add to the growing tensions just a few days before Donald Trump’s crypto-friendly regime takes office in the United States.
Frequently Asked Questions (FAQs)
Why is Operation Chokepoint 2.0 such a hot issue?
Critics argue that the operation unfairly targets the crypto industry and that its implementation will limit innovation.
Has Chokepoint 2.0 achieved its objectives?
While the plan’s effectiveness remains debatable due to its informal nature, critics believe some banks were pressurized to deny crypto firms banking services.
What are the potential consequences to the crypto industry?
Some potential consequences include reduced banking access for crypto businesses, reduced innovation, and more restrictions on crypto industry players.
