Senator Cynthia Lummis Raises Alarming Allegations Against FDIC Over Crypto Oversight

By: Eva Baxter

In a major development within the digital asset realm, United States Senator Cynthia Lummis has leveled significant allegations against the Federal Deposit Insurance Corporation (FDIC). The senator accuses the FDIC of destroying documents and suppressing staff during an investigation into digital currency oversight, in response to whistleblower claims from within the agency.

Lummis has penned a letter to FDIC Chair Marty Gruenberg, charging that internal whistleblowers have reported efforts to destroy materials related to the FDIC’s activities concerning digital assets. The senator has strongly insisted these actions be halted immediately as part of an anticipated Congressional review. This has intensified scrutiny of the FDIC's conduct amidst an environment already fraught with rigorous oversight of digital asset management.

The allegations specifically cite a controversial initiative, termed 'Operation Chokepoint 2.0', that targets financial institutions associated with so-called high-risk industries, including digital currencies. According to the allegations, FDIC staff members have reportedly endured threats of legal ramifications, intended to prevent them from sharing information with the Senate. Management is alleged to be vigilantly monitoring document access to avert leaks while taking steps to potentially destroy materials.

In her correspondence, Lummis demands Gruenberg ensure a cessation of any document destruction and enforce preservation of all existing records pertaining to the FDIC's digital asset initiatives since early 2022. These initiatives cover a range of activities, notably oversight over banks significantly engaged in the crypto sector, such as Signature Bank and Silvergate Bank, as well as the creation of digital asset policies.

Lummis's directive to preserve records includes any materials referencing digital currencies under terms like 'crypto', 'cryptocurrency', 'Bitcoin', and 'Ethereum'. She emphasizes that confidentiality or privileged status does not preclude these documents from Senate oversight. The senator warns of possible referral to the US Department of Justice for a criminal probe if evidence substantiates deliberate obstruction or destruction of oversight materials by FDIC staff.

At this juncture, as the debate over digital asset regulations heightens, the leading cryptocurrency, Bitcoin, is trading above $101,000, showing an upward trend of approximately 8% this week.