Recently, the Federal Deposit Insurance Corporation (FDIC) released 175 documents concerning its supervision of banks engaged in, or seeking to engage in, crypto-related activities. This release marks a significant step towards transparency in the regulatory oversight of cryptocurrency and blockchain technologies.
Acting Chairman Travis Hill provided a statement regarding the document release: “I have been critical in the past of the FDIC’s approach to crypto assets and blockchain. As I said last March, the FDIC’s approach ‘has contributed to a general perception that the agency was closed if institutions are interested in anything related to blockchain or distributed ledger technology.’
Upon becoming Acting Chairman, I directed staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services. While this review remains underway, we are releasing a large batch of documents today, in advance of a court-ordered deadline of Friday. Our decision to release these documents reflects a commitment to enhance transparency, beyond what is required by the Freedom of Information Act (FOIA), while also attempting to fulfill the spirit of the FOIA request.”
Previously, the FDIC sent letters to numerous financial institutions requesting that they “pause, or not expand, planned or ongoing crypto-related activities.” In June 2024, a lawsuit was brought in federal court seeking to compel the FDIC to provide copies of these pause letters under the Freedom of Information Act. The FDIC then in December 2024 and again on January 3, 2025 released redacted copies of some but not all of these 25 “pause” letters sent to 24 institutions interested in pursuing crypto- or blockchain-related activities as well as a redacted memorandum from 2022 that details the procedures that were to be followed and questions to pose to financial institutions as part of supervision. The newly released 175 documents, available here, include additional correspondence with those 24 institutions and with other institutions beyond those initially identified. These documents reveal that requests from banks were often met with resistance, including repeated requests for further information, prolonged periods of silence, and directives to pause or refrain from expanding crypto- or blockchain-related activities. This approach effectively discouraged many banks from pursuing these initiatives.
Looking ahead, the FDIC is actively reevaluating its supervisory approach to crypto-related activities. This includes replacing Financial Institution Letter 16-2022, which required all FDIC-supervised institutions that intended to engage in, or that were currently engaged in, any activities related to crypto assets to notify the FDIC and provide certain information, and establishing a pathway for institutions to engage in crypto- and blockchain-related activities while adhering to safety and soundness principles. The FDIC also plans to engage with the President’s Working Group on Digital Asset Markets, established by the President’s January 23, 2025 Executive Order.
