In a significant shift for the cryptocurrency industry, FDIC Acting Chairman Travis Hill announced on February 5, 2025, that the agency is completely revamping its approach to cryptocurrency supervision. This announcement came just hours before the Senate Banking Committee convened a hearing to investigate regulatory practices that have systematically kept banks away from serving crypto businesses.

Hill, who was appointed by President Trump, has released additional correspondence between the FDIC and banks that reveals how regulators actively discouraged financial institutions from engaging with cryptocurrency businesses. These documents have been at the center of a Freedom of Information Act legal battle between Coinbase and the FDIC, with courts ordering the regulator to increase transparency.

“I directed staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services,” Hill stated. “While this review remains underway, we are releasing a large batch of documents today, in advance of a court-ordered deadline of Friday.”

The acting chairman acknowledged that the FDIC had created an environment where banks found it virtually impossible to serve crypto clients. He described how banks interested in cryptocurrency business faced systematic obstacles, including “repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity.”

Hill promised that going forward, the FDIC will be “providing a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles.”

When the Senate Banking Committee hearing began, Chairman Tim Scott, a Republican from South Carolina, condemned the previous regulatory approach as a “disgusting and disheartening picture of abuse” and praised Hill’s reform initiatives.

During the hearing, Nathan McCauley, co-founder and CEO of federally chartered crypto bank Anchorage Digital, testified about his company’s experience being cut off from banking relationships due to regulatory pressure.

“To say this is pervasive is an understatement,” McCauley testified. “It’s been across the entire industry, everybody has dealt with this.”

He described the situation as so commonplace that “it became background noise” where it was “just assumed that if you were a crypto company, you would have trouble getting bank services.”

McCauley argued that regulators had acted against the genuine interests of the banking sector, stating, “All of the big banks wanted to work with crypto and were scared away from it by the regulatory apparatus.”

Even Senator Elizabeth Warren, the committee’s ranking Democrat, found common ground on this issue despite her typical skepticism toward the crypto industry.

“I don’t think for a second that you should be locked out of our banking system,” Warren said. “In many cases, it is wrong for banks to close accounts and threaten your ability to make payroll or pay rent on time without even providing an explanation, so long as you are following the law.”

The examination of crypto debanking practices will continue with a House Financial Services Committee hearing scheduled for February 6, followed by another crypto-focused hearing on February 11 titled “A Golden Age of Digital Assets: Charting a Path Forward.”

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Meta Title: FDIC Overhauls Crypto Policy Under Hill’s Lead

Meta Description: FDIC Acting Chairman Travis Hill announces cryptocurrency supervision reforms as Senate investigates the systematic debanking of crypto businesses.