FDIC Axes Previous Rule, Gives Green Light to Banks To Conduct ‘Crypto-Related Activities’ Without Prior Approval

The U.S. Federal Deposit Insurance Corporation (FDIC) has just given its member banks the green light to conduct “crypto-related activities” without prior approval.

The federal banking regulator rescinded a previous rule requiring supervised banks to send notifications if they wanted to get involved in digital assets.

Now, the FDIC says its member institutions can conduct crypto activities as long as they “adequately manage the associated risks.”

FDIC Acting Chairman Travis Hill says the change represents the regulator “turning the page on the flawed approach of the past three years.”

“I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards.”  

Numerous crypto stakeholders in recent years accused the FDIC of facilitating “Operation Choke Point 2.0,” an alleged attempt by Biden Administration government regulators to stifle the digital asset industry.

Coinbase, for example, has been using the Freedom of Information Act (FOIA) to uncover instances of the FDIC asking banks to freeze crypto services, known as “pause letters.”

Last month, the FDIC released redacted documents related to its supervision of crypto-related activities, which include pause letters sent to 24 banks.

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