Crypto supporter Sen. Lummis threatens to bring legal action against FDIC over alleged destruction of crypto documents

Crypto-supportive Sen. Cynthia Lummis is threatening criminal repercussions over allegations that the Federal Deposit Insurance Corporation is destroying digital asset-related materials.

In a letter sent to the FDIC Chair Martin Gruenberg on Thursday, the Wyoming Republican said FDIC whistleblowers reached out to her regarding the alleged destruction of those documents and that they were being "closely monitored by management" in an effort to prevent them from going to the Senate, threatening legal action.

“The FDIC’s alleged efforts to destroy and conceal materials from the U.S. Senate related to Operation Chokepoint 2.0 is not only unacceptable, it is illegal,” Lummis said in a statement. “If it is uncovered that anyone within the FDIC has knowingly destroyed materials or sought to obstruct the oversight functions of the Senate, it will result in swift criminal referrals to the U.S. Department of Justice.”

The FDIC declined to comment when asked by The Block.

Concerns from some lawmakers and the crypto industry over regulators' approach to banks' access to crypto have come to the surface over the past year. Coinbase, through consultant firm History Associates Inc., sued  FDIC in June and accused the agency of trying to cut off the crypto industry from the banking sector.

Some in the crypto industry use the phrase "Operation Choke Point 2.0" to compare it with Operation Choke Point 1.0, a 2013 U.S. Department of Justice Initiative that sought to limit banking services for industries considered high-risk for fraud and money laundering, including payday lenders and firearm dealers.

FDIC has said it does not discourage financial institutions from working with crypto. In the 2024 Risk Review report , the FDIC said it and other agencies "continue to emphasize that banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type."

Lummis asked the FDIC in her letter on Thursday to preserve all material connected to the agency's digital asset-related activities since Jan. 1, 2022, including communications with other federal and state banking agencies about digital assets and pending enforcement actions.

Lummis is poised to lead the Senate Banking Committee's panel focused on digital assets, created by the committee's Chair Tim Scott (R-S.C.). Crypto in general is expected to come into a focus in a Republican-led Congress, with hearings honed in on crypto debanking, stablecoins and regulating the industry at large.