FDIC Agrees to Pay Attorney Fees and Withdraws FOIA Dispute, Ending Crypto "Pause Letter" Lawsuit

Odaily News The Federal Deposit Insurance Corporation (FDIC) has agreed to pay $188,440 in attorney fees and withdrawn its previous stance of refusing to disclose crypto-related "pause letters," reaching a settlement in a Freedom of Information Act (FOIA) lawsuit. The lawsuit involves what is externally referred to as "Operation Choke Point 2.0," where regulators are alleged to have informally requested banks to pause or restrict cryptocurrency business.

According to a joint status report filed with the Washington federal court, the FDIC will fully cover the attorney fees for History Associates, which filed the information request, and will adjust some of its FOIA enforcement practices. Previously, the court ruled that the FDIC had violated FOIA by not reviewing documents individually but rather denying disclosure of related records as a whole.

The report indicates that related documents show the FDIC had sent letters to multiple banks, requesting them to pause or not expand crypto-related business. This settlement also includes the FDIC's commitment to clarify in internal training that blanket exemption policies will not be applied to bank regulatory documents. The case will be formally dismissed upon completion of the fee payment. (Decrypt)