• Ripple CTO David Schwartz criticizes FDIC enforcement actions amid regulatory uncertainty.

• Coinbase reveals over 20 instances where the FDIC discouraged banks from supporting crypto activities.

• The crypto community anticipates changes with the pro-crypto Trump administration taking office in 2025.

Ripple CTO David Schwartz has criticized the Federal Deposit Insurance Corporation (FDIC) for its actions against crypto, particularly following revelations from Coinbase about the FDIC’s efforts to discourage banks from supporting the industry due to regulatory uncertainty.

FDIC’s Crypto Roadblocks

Recent court filings and industry disclosures have put a spotlight on regulatory tactics concerning the crypto sector. New documents reveal that in 2022, the FDIC advised banks to suspend crypto-related activities, citing unresolved regulatory risks.

Coinbase’s investigation into these actions uncovered over 20 instances where the FDIC discouraged financial institutions from offering services to the crypto sector.

These findings came to light through a Vaughn Index outlining letters exchanged between the FDIC and banks. The documents, some dating back to March 2022, raise concerns about financial stability, operational safety, and compliance risks linked to crypto products.

One such letter from March 2022 saw an FDIC representative urging a bank to “pause all crypto asset-related activity,” while another asked for more extensive risk assessments before expanding crypto services. This has led to sharp criticism from key figures in the crypto community.

Ripple CTO Responds

In response to the FDIC’s stance, Ripple CTO David Schwartz expressed his concerns on social media. He questioned the logic behind enforcement actions in an environment of regulatory uncertainty.

“When the government can’t even figure out what the law requires, how can you possibly justify enforcement actions?” Schwartz tweeted, highlighting the confusion surrounding regulatory clarity in the crypto space.

Coinbase’s Chief Legal Officer, Paul Grewal, also underscored the need for transparency. He argued that the FDIC’s actions could hinder banks from supporting the growing crypto ecosystem.

Coinbase has pledged to file Freedom of Information Act (FOIA) requests to uncover further details on the regulatory direction and to ensure that financial institutions are not unduly discouraged from engaging with crypto.

Hope in Sight

These developments highlight a significant standoff between regulators and the crypto industry. However, with the upcoming pro-crypto Trump administration set to take office in January 2025, the crypto community sees a potential transformation. 

Notably, Donald Trump has appointed David Sacks as the White House A.I. & Crypto Czar, and Sacks is now calling for investigations into Operation Choke Point 2.0.