In a series of documents released on Friday, the Federal Deposit Insurance Corporation (FDIC) clarified that it advised banks to pause direct engagement in cryptocurrency activities in 2022 and 2023, but did not order banks to stop offering banking services to crypto companies. This comes amid complaints from the crypto industry, which claims widespread “debanking” by traditional banks. The release of these documents follows a lawsuit filed by Coinbase, which sought to reveal the FDIC’s supervisory actions towards banks interacting with the crypto sector.
The FDIC’s guidance, provided in “pause letters” sent to various banks, emphasized the risks of directly holding crypto assets, but did not mandate that banks sever ties with crypto clients or cut off banking services for crypto companies. In contrast, the regulator issued instructions to pause or slow down crypto ventures and requested detailed clarifications from banks exploring direct involvement with crypto.
Coinbase’s legal team, alongside other crypto advocates, has criticized the regulator’s stance as an attempt to stifle the sector. Meanwhile, the FDIC published a 2022 internal memo to further clarify the difference between traditional banking services for crypto firms—such as offering deposit accounts—and direct crypto activities, like holding or trading crypto assets. The memo suggests stricter scrutiny for direct crypto engagement.
The timing of the document release is significant, coinciding with President-elect Donald Trump’s upcoming inauguration. His administration is expected to announce a broader crypto policy overhaul, with reports indicating that he may issue an executive order encouraging regulators to ease their stance on the industry.