Calling the move “just noise, not real progress,” Lummis criticized the Fed’s decision on April 25 via a post on X, arguing that the withdrawal of its 2022 supervisory letter — which had previously discouraged banks from engaging with crypto and stablecoins — was mere “lip service.”

A Divergent Voice Amid Crypto Optimism

While industry leaders like Michael Saylor and Anthony Pompliano welcomed the Fed’s latest action, Lummis adopted a far more cautious tone.

Having introduced the Bitcoin Strategic Reserve Act in July 2024, Lummis emphasized that the Fed is still violating laws concerning master accounts and continues to use reputational risk as a supervisory tool when evaluating banks.
Her remarks come at a time when the Federal Deposit Insurance Corporation (FDIC) is reportedly drafting a rule that would prevent regulators from considering reputational risk in bank examinations.

Lummis also noted that the Fed’s Section 9(13) policy statement remains intact, where Bitcoin and other digital assets are still labeled as “unsafe and unsound.”

Additionally, she pointed out that several officials involved in the controversial “Operation Chokepoint 2.0” effort are still active in shaping crypto regulations today.

“We are not fooled. The Fed deliberately targeted companies in the crypto sector, stifled American innovation, and shuttered businesses,” Lummis stated.
“This battle is far from over. Until the digital asset industry receives more than a life raft — until it gets a fair chance — I will continue holding the Fed accountable,” she added, directly addressing Fed Chair Jerome Powell.

Support from Custodia Bank CEO

Caitlin Long, founder and CEO of Custodia Bank, echoed Lummis’ skepticism, thanking her for “seeing this for what it really is.”

However, much of the broader crypto community viewed the Fed’s decision as a positive milestone.
Michael Saylor declared in an April 25 post that “banks are now free to support Bitcoin.“

Meanwhile, Anastasija Plotnikova, co-founder and CEO of blockchain compliance firm Fideum, described the move as a “key development that will pave the way for institutional adoption.”

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U.S. Government Rejects Transparency Requests Regarding Operation Chokepoint 2.0

Some U.S. government agencies continue to reject transparency requests regarding their role in Operation Chokepoint 2.0, during which crypto and tech founders were allegedly denied banking services under the Biden administration, according to Coinbase’s Chief Legal Officer Paul Grewal.

The collapse of crypto-friendly banks in early 2023 sparked the first allegations of Operation Chokepoint 2.0. Critics, including venture capitalist Nic Carter, described it as a government effort to pressure banks into severing ties with cryptocurrency firms.

Despite recent regulatory changes, agencies like the Federal Deposit Insurance Corporation (FDIC) continue to “resist basic transparency” efforts, Grewal wrote in a March 8, 2025 post.

“They haven’t gotten the message,” he added.

Coinbase Requests FDIC to Disclose Operation Chokepoint 2.0 Documents

Coinbase requested that the FDIC explain how it conducted “due diligence” to ensure no documents related to the event were destroyed in court. However, the agency “repeatedly refused to do so,” Grewal said.

These comments came just hours after the U.S. Office of the Comptroller of the Currency (OCC) softened its stance on how banks can engage with crypto. U.S. President Donald Trump vowed to end the prolonged crackdown restricting crypto firms’ access to banking services.

Trump said during the White House Crypto Summit, “I am ending Operation Chokepoint 2.0” to industry leaders.

Grewal: FDIC Did Not Fully Cooperate with Coinbase’s FOIA Requests

Grewal claimed that the FDIC did not fully cooperate with Coinbase’s Freedom of Information Act (FOIA) requests.

“The agency has only produced snippets from a few documents that have little to no relation to the specific FOIA policies or practices discussed in History Associates’ amended complaint. What exactly are they hiding?” wrote Grewal.

Additionally, Grewal noted that the FDIC had redacted a total of 53 pages, with many other pages containing “heavy redactions rendering the documents unintelligible.”

Grewal also mentioned that his team had requested the FDIC provide a “sworn testimony” to the court.

On March 4, Coinbase submitted a FOIA request to the U.S. Securities and Exchange Commission (SEC) to find out how many investigations and enforcement actions were brought against crypto firms between April 17, 2021, and January 20, 2025.

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On February 4, according to Bloomberg, Coinbase sent a letter to the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), requesting clarity on the status of banking services for crypto.  In the letter, Coinbase urged the OCC to withdraw an interpretive letter that “imposes a de facto application process for novel banking activities,” which it claims prevents banks from entering the crypto asset market.

Additionally, Coinbase is requesting confirmation from the Federal Reserve and the FDIC that state-chartered banks are authorized to provide and outsource crypto custody and execution services.

Coinbase Requests OCC to Remove Barriers for Crypto Market Access

Coinbase has asked the Office of the Comptroller of the Currency (OCC) to withdraw its interpretive letter that imposes a de facto application process for innovative banking activities, which Coinbase argues prevents banks from entering the crypto asset market. The exchange has also sought the intervention of the Federal Reserve and the FDIC to confirm that state-chartered banks have the authority to offer crypto custody and trading services.

According to Bloomberg, three law firms representing Coinbase have pointed out that current federal laws already allow banks to provide crypto services and collaborate with third-party service providers like Coinbase. Coinbase is now waiting for banking regulators to confirm this stance. The law firms involved include Arnold & Porter Kaye Scholer, Cleary Gottlieb Steen & Hamilton, and Wilmer Cutler Pickering Hale & Dorr.

Faryar Shirzad, Coinbase’s Chief Policy Officer, emphasized, “It is crucial for regulators to clarify that banks can work with third-party providers in offering trading and exchange services.”

Legal Struggles with FDIC: Digital Asset Firms Face Challenges

The role of US banks in serving the crypto industry has been a contentious issue. Some reports have suggested that the FDIC has instructed several US banks to halt their crypto-related activities. In June 2024, Coinbase filed lawsuits against the SEC and the FDIC, accusing them of orchestrating efforts to deprive digital asset firms of essential banking services.

In an ongoing legal battle, Coinbase’s Chief Legal Officer, Paul Grewal, stated in January 2025 that the FDIC deliberately omitted certain “pause letters” related to crypto in a Freedom of Information Act case. As President Donald Trump took office in January 2025, the community is now waiting for positive changes within the US crypto ecosystem. Coinbase, strengthening its ties with the Trump administration, hopes to foster new opportunities for crypto and economic freedom.

Coinbase’s Crypto Custody and Trading Support Marks Key Development

Coinbase’s move to reinforce its crypto custody and trading support is significant, especially as the platform provides custody services for Bitcoin exchange-traded funds (ETFs) that started trading in 2024. This step highlights Coinbase’s growing influence in supporting the broader crypto market in the US.

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FDIC Deputy Director Travis Hill’s Remarks on Crypto Regulations

Travis Hill, the Deputy Director of the Federal Deposit Insurance Corporation (FDIC), criticized the government’s exclusionary approach towards the cryptocurrency sector, emphasizing the need for more open and transparent regulation.

Hill highlighted the necessity of clear and detailed guidelines for banks on how to collaborate with digital assets. He pointed out that the FDIC should adopt an approach that does not hinder banks from working in line with technology and supports innovation.

Clear Guidelines Needed for Banks Working with Digital Assets

In his remarks, Hill stated that banks need more clarity and guidance when it comes to working with digital assets. Recently, concerns have emerged regarding the FDIC’s efforts to discourage banks from participating in crypto activities.

In June, Coinbase filed a lawsuit against the FDIC, claiming that the agency issued directives to banks to halt their crypto operations. Following this lawsuit, Hill stressed that the FDIC should adopt a more flexible, case-by-case approach to digital assets.

He further emphasized that, with proper regulations, the growth of the cryptocurrency industry can be integrated into the financial system without hindering its development.

Criticism of “Operation Choke Point 2.0” and the Bank Secrecy Act

Hill also criticized the “Operation Choke Point” program, which aimed to restrict banking services for high-risk sectors associated with fraud.

The cryptocurrency industry had described attempts to block digital asset companies’ access to banking services as “Operation Choke Point 2.0.” Hill stated that such practices should be terminated and emphasized the need for a new approach towards digital assets.

Additionally, Hill pointed out the current practices under the Bank Secrecy Act (BSA). He argued that the BSA compels banks to close accounts instead of addressing non-compliance risks, which may negatively impact legitimate businesses. He called for a reevaluation of how the BSA is enforced.

Hill stressed the need for removing obstacles to banks working with the crypto sector, provided there are clear regulations and guidelines.

Criticism of the SEC’s Crypto Accounting Rules

Hill also criticized the 2022 accounting guidance issued by the U.S. Securities and Exchange Commission (SEC), which requires crypto custody firms to record customer assets on their balance sheets. He pointed out that this rule contradicts the common practice of keeping customer assets off the balance sheets of custody institutions.

Hill noted that this regulation could complicate the operations of custody firms within the sector.

In conclusion, Hill emphasized that banks are not prohibited from engaging in crypto-related activities, and as stated in the FDIC’s 2024 Risk Review, banks face no restrictions in providing services to crypto businesses.

These statements once again highlighted the need for a more transparent regulatory process.

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