FDIC agrees to pay legal fees and withdraw FOIA dispute, ending the crypto "Suspension Letter" lawsuit

Odaily Planet Daily News: The Federal Deposit Insurance Corporation (FDIC) has agreed to pay $188,440 in legal fees and withdraw its previous stance of refusing to disclose a “pause letter” related to cryptocurrency, reaching a settlement in a Freedom of Information Act (FOIA) lawsuit. The lawsuit concerns what is known externally as “Operation Choke Point 2.0,” where regulators are accused of unofficially instructing banks to suspend or restrict crypto activities.

According to a joint status report filed with the U.S. District Court in Washington, the FDIC will cover the full legal fees of History Associates, the party that filed the FOIA request, and will adjust some FOIA enforcement practices. Previously, the court ruled that the FDIC violated FOIA by refusing to disclose relevant records in whole rather than reviewing documents on a case-by-case basis.

The report indicates that related documents show the FDIC sent letters to multiple banks, requesting them to suspend or not expand crypto-related activities. The settlement also includes the FDIC’s commitment to explicitly clarify in internal training that a comprehensive exemption policy does not apply to bank regulatory documents. The case will be officially dismissed once the fees are paid. (Decrypt)