FDIC Agrees to Pay Fees, Drop FOIA Fight Over Crypto 'Pause Letters'
The FDIC settled a FOIA lawsuit by agreeing to pay $188,440 in legal fees and to change certain practices, after being forced to release records showing it had pressed banks to halt or limit crypto activities—actions linked to alleged “Operation Choke Point 2.0.” This followed court findings that the FDIC violated FOIA by categorically withholding and excessively redacting crypto-related "pause letters." The released records confirmed agency efforts to dissuade banks from working with crypto firms, which critics argue were driven more by political and reputational concerns than by sound financial analysis. The settlement requires the FDIC to update its training, clarifying that it does not categorically withhold all supervisory documents under FOIA and must review requests on a document-by-document basis. Critics argue such opaque regulatory pressure undermines trust and call for oversight based on transparent, risk-based standards. The settlement closes the case, and once payment is issued, parties will formally dismiss it.
