A classified page in the Federal Reserve’s Internal Implementation Handbook presented by pro-crypto Senator Cynthia Lummis today has exposed the Federal Reserve’s involvement in the crypto industry’s debanking under former president Joe Biden.
The classified page reveals that the central bank has internal guidelines instructing staff to handle “controversial” clients—including crypto companies—with extreme caution. Cynthia presented the page during the Senate Banking Committee’s heated hearing on debanking earlier today.
The document also proves that there are so-called “master accounts” that reportedly give banks direct access to the Fed’s payment systems, allowing them to move money, clear checks, and settle transactions without needing a middleman.
Can anyone give me an objective definition of what makes a “controversial comment?” pic.twitter.com/IiuiAIBHXf
— Senator Cynthia Lummis (@SenLummis) February 5, 2025
For banks serving the crypto industry, these accounts are essential to operating on a national scale. But many, including crypto-friendly Custodia Bank, have been denied access without any explanation. The Fed still insists there’s no bias though.
FDIC slammed for pressuring banks to cut off crypto access
The Federal Deposit Insurance Corporation (FDIC) has its own role in this debanking mess. Newly released records show that the FDIC issued 24 “pause letters” to banks, ordering them to stop or limit services for crypto companies.
As was reported by Cryptopolitan today, these letters cited vague “safety and soundness concerns” but provided little concrete guidance. Caitlin Long, CEO of Custodia Bank, confirmed that banks were under intense pressure. “The FDIC did pressure some banks not to take US dollar deposits from crypto companies,” she said during the hearing.
In one outrageous case, a bank was forced to reimburse its customers for losses tied to Bitcoin’s price drops. The bank’s program wasn’t even set up to handle such risks, but the FDIC pushed them into covering the losses anyway. This left many in the crypto community shaking their heads. Why was a bank being held responsible for crypto price fluctuations when that wasn’t part of the deal?
Scott Bessent, the pro-crypto Treasury Secretary recently appointed to the FDIC’s board, is now caught in the middle of the fallout. Although it’s unclear what role he played in the document release, the timing is suspicious.
This release follows recommendations from the FDIC’s Office of Inspector General, which suggested stricter oversight of banks working with crypto. President Donald Trump campaigned on promises to dismantle what’s being called “Operation Choke Point 2.0.”
Crypto companies demand answers as Operation Choke Point 2.0 bites
During the Senate Banking Committee hearing, Committee Chairman Tim Scott of South Carolina asked just how widespread crypto debanking has become. Nathan McCauley, CEO of Anchorage Digital Bank—the only crypto bank with a national charter—said:
“I was speaking to a room of about 100 crypto founders in San Francisco. I asked them to raise their hands if they’d had trouble getting or keeping a bank account. Every single hand went up.”
McCauley added that his own bank had been in discussions with several financial institutions to expand crypto-related services. But those plans died on arrival thanks to Operation Choke Point 2.0. He said the crypto industry wasn’t asking for special treatment, just clear rules.
Coinbase, the largest crypto exchange in the US, called the current situation “untenable” and accused regulators of leaving banks and crypto firms stuck in limbo in a letter to the FDIC. “Instead of issuing clear, durable rules, banking regulators have chosen to issue opaque, inconsistent guidance,” the letter said.
On social media, the outrage grew louder in October 2024 after Marc Andreessen, co-founder of venture capital firm a16z, spoke out during an appearance on The Joe Rogan Experience and called crypto debanking a political issue, blaming regulators for acting like judge, jury, and executioner.
Marc directly called out the Consumer Financial Protection Bureau (CFPB), describing it as Senator Elizabeth Warren’s personal tool. “You have this thing called the CFPB,” he said. “It’s Elizabeth Warren’s weapon, and she gets to control it.”
Warren fired back during the hearing, saying the CFPB was the only agency working to protect consumers and stop unfair debanking practices, but let’s be real, no one is trusting the lady with years of crypto-hating history.
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