Shocking FDIC Secrecy: Coinbase CLO Exposes Operation Chokepoint 2.0 Roadblock

Is the truth about Operation Chokepoint 2.0 still buried in secrecy? Coinbase’s Chief Legal Officer, Paul Grewal, is raising serious alarms, accusing the Federal Deposit Insurance Corporation (FDIC) of actively resisting transparency regarding its role in the controversial initiative. As crypto enthusiasts and industry players seek clarity, Grewal’s revelations paint a concerning picture of continued regulatory opacity.

FDIC’s Resistance to Transparency: What’s Being Hidden in Operation Chokepoint 2.0?

Operation Chokepoint 2.0, a term that surfaced during the Biden administration, is alleged to be a covert campaign targeting tech and cryptocurrency firms by pressuring banks to cut off their services. The collapse of several crypto-friendly banks in early 2023 ignited these concerns, with critics like Nic Carter pointing fingers at government pressure. Despite some shifts in regulatory discourse, Grewal asserts that the FDIC remains stubbornly opaque, hindering efforts to understand the full scope of Operation Chokepoint 2.0.

In a recent post on X, Grewal stated plainly, “They haven’t gotten the message,” referring to the FDIC’s continued resistance to basic transparency. This statement underscores the ongoing frustration from the crypto industry in seeking accountability and clarity from regulatory bodies.

Coinbase CLO Demands Answers: Unveiling the FDIC’s “Due Diligence”

Coinbase CLO Paul Grewal is not just making accusations; he’s taking action. Coinbase has formally requested the FDIC in court to disclose details about its “due diligence” processes, specifically aimed at ensuring no documentation related to Operation Chokepoint 2.0 was destroyed. However, according to Grewal, the agency has “repeatedly refused to do so.”

This refusal comes at a critical juncture. The Office of the Comptroller of the Currency (OCC) recently softened its stance on banks engaging with crypto, and former President Trump even vowed to end Operation Chokepoint 2.0 at the White House Crypto Summit. Yet, the FDIC’s alleged stonewalling suggests a disconnect between stated policy shifts and on-the-ground practices.

Crypto Debanking: The Shadowy Impact of Operation Chokepoint 2.0

Reports indicate that at least 30 tech and crypto founders were allegedly “secretly debanked” in the US under Operation Chokepoint 2.0. This alleged crypto debanking raises serious questions about fair access to financial services and the potential for regulatory overreach. The lack of transparency from agencies like the FDIC only fuels suspicion that these actions were not isolated incidents but part of a coordinated effort.

Adding to the intrigue, Grewal highlights that the FDIC has only provided “snippets” of documents in response to Freedom of Information Act (FOIA) requests. He further claims that the agency has redacted 53 pages and heavily obscured many others, rendering them “unintelligible.” This raises a critical question: “What exactly are they hiding?”

Coinbase has gone further, requesting sworn testimony from the FDIC in court, pushing for greater accountability and disclosure. Simultaneously, Coinbase has also filed a FOIA request with the Securities and Exchange Commission (SEC), seeking data on investigations and enforcement actions against crypto firms since April 2021. These parallel actions demonstrate a multi-pronged approach to uncover the extent of regulatory scrutiny and potential biases within government agencies.

Is Transparency on the Horizon for Operation Chokepoint 2.0?

While former President Trump’s executive order aimed to ease banking challenges for Web3 companies and create clearer digital asset regulations, crucially excluding the Federal Reserve and FDIC from cryptocurrency working groups, the current resistance from the FDIC presents a significant hurdle. Caitlin Long, founder of Custodia Bank, suggests this executive order could signal an end to previous crypto debanking efforts. However, the ongoing battle for transparency with the FDIC, as highlighted by Coinbase CLO Paul Grewal, indicates that the full picture of Operation Chokepoint 2.0 and its impact remains shrouded in mystery.

The crypto community awaits further developments, hoping that the push for transparency will eventually unveil the full truth behind Operation Chokepoint 2.0 and ensure fair and open access to banking services for the burgeoning digital asset industry.