CryptoLaw accuses the FDIC of misplacing its priorities amid the crypto debanking debate.
In recent years, complaints The fact that federal banking regulators, particularly the Federal Deposit Insurance Corporation (FDIC), have intentionally pressured banks to cut off the crypto sector has been a raging topic among crypto proponents.
This issue has come to the forefront again based on recent facts buried in a seemingly unrelated case.
Crypto is bad, but Russia is good?
CryptoLaw, a platform founded by pro-crypto attorney John Deaton and dedicated to sharing legal and regulatory updates regarding the crypto industry, has accused the FDIC of criminally misplaced priorities.
In an X post On Thursday, January 9, the company claimed that the banking regulator had allowed US companies to send payments to Russia while freezing legitimate crypto companies.
THE @FDICgov was it abused to stifle legitimate crypto companies but let a US company send money to sanctioned Russian banks? (Damien v. @Deel1:25-cv-20017 SDFla.) @FDIC_Exposed pic.twitter.com/ZAVIBcGgxl
– Cryptocurrency Law (@CryptoLawUS) January 9, 2025
The basis for these claims lies in facts shared in a class action against popular payroll and human resources company Deel.
In court documents, the plaintiffs insinuate that Deel facilitated payments to Russian T-Bank users despite existing sanctions against the Eastern European giant for its war against Ukraine. The plaintiffs do this by stating that the T-Bank website had instructed customers to receive payments through Deel no later than October 2024.
Although no proof of transfer beyond this statement appears to have been provided, it was enough to rally the cryptocurrency crowd, who were quick to call out the banking regulator, arguing a lack of balance of priorities.
Operation Chokepoint 2.0
The theory that crypto is unbanked in the United States began to gain momentum in early 2023, primarily driven by the writings from crypto thought leader Nic Carter.
In February 2023, he argued that banking regulators’ warnings about crypto risks following the collapse of FTX bore the marks of what he described as Operation Chokepoint 2.0.
He argued that banking regulators were trying to exclude the crypto industry from banking through informal advice, as they attempted to do with payday lenders, arms dealers and pornographers in 2013 as part of an infamous initiative dubbed Operation Chokepoint.
Disputes The closure of crypto-friendly banks, like Signature Bank, during the wave of bank runs in the first quarter of 2023, seemed at the time to help support Carter’s view.
However, it was necessary November 2024 statements by Marc Andreessen, partner at Andreessen Horowitz (A16Z), lamenting crypto debanking on the Joe Rogan Experience podcast to reignite the debate.
Break of letters
Further fueling the fire, Coinbase recently letters obtained from the FDIC via a Freedom of Information Act (FOIA) request showing that the regulator had asked banks to suspend crypto services to customers pending the completion of regulatory reviews.
While Coinbase used these documents as evidence for allegations of banking withdrawal from the crypto industry, FDIC Chairman Martin Gruenberg disagrees.
In the declarations To Capitol Account co-author Ryan Tracy, Gruenberg claimed that the FDIC’s instructions were intended to discourage banks from adding crypto to their balance sheets and were in no way aimed at individual customer transactions.
DisClamier: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
