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Hundreds of documents released by the Federal Insurance Deposit Corporation (FDIC) show how American financial institutions were deterred from providing services linked to cryptocurrency. 175 documents that describe the FDIC’s supervision of banks that use or are considering blockchain and cryptocurrency assets are included in the release.
Travis Hill, Acting Chairman of the FDIC, addressed the newly released documents, explaining how the agency’s tactics led banks to abandon efforts to engage with digital assets. Hill previously criticized the FDIC’s approach, stating that the agency’s stance created an impression of being “closed for business” for banks interested in blockchain or distributed ledger technology.
The documents confirm that requests from banks seeking to engage in crypto or blockchain services were often met with barriers. These included repeated demands for more information, extended periods of silence, and even instructions to pause or halt all related activities. According to Hill, these actions led most banks to ultimately cease their efforts to explore the digital asset sector.
“I have been critical in the past of the FDIC’s approach to crypto assets and blockchain,” Hill said. “The documents released today show that the FDIC made it so difficult for institutions to explore blockchain and crypto that many simply gave up.”
In December, a Freedom of Information Act (FOIA) request by Coinbase uncovered several instances where the FDIC instructed banks to freeze or avoid crypto-related services. At the time, Coinbase’s chief legal officer, Paul Grewal, argued that the information revealed the U.S. government’s deliberate attempt to undermine the digital assets industry.
These revelations underscore growing concerns about how government agencies are interacting with the crypto sector. They highlight the challenges faced by banks and financial institutions as they navigate a regulatory environment that appears to be resistant to blockchain and crypto innovation.