Senator Cynthia Lummis has warned the FDIC and U.S. Marshals over alleged digital asset oversight misconduct and rushed Bitcoin sales.
U.S. Senator Cynthia Lummis (R-WY), a vocal advocate for Bitcoin, has issued strong warnings to two federal agencies: the Federal Deposit Insurance Corporation (FDIC) and the U.S. Marshals Service. These warnings address alleged misconduct in digital assets oversight and the sale of seized Bitcoin holdings. The actions come just days before President-elect Donald Trump assumes office, signaling a potential shift in the U.S. government's stance on digital assets.
Senator Lummis has expressed concerns over the agency's plan to liquidate nearly 70,000 Bitcoin (valued at approximately $6.9 billion) seized in the Silk Road case. She argued that the sales contradict the incoming administration's potential plans to establish a Strategic Bitcoin Reserve.
In her letter, Lummis wrote, “This rushed approach... directly contradicts the incoming administration's stated policy objectives regarding the establishment of a National Bitcoin Stockpile.” Lummis emphasized the need to slow the liquidation process, given the legal challenges and the administration's stated interests.
Lummis also issued a scathing letter to FDIC Chair Marty Gruenberg following whistleblower allegations. Reports claim the FDIC destroyed documents related to its digital assets oversight and threatened staff to suppress information. These actions, allegedly tied to “Operation Chokepoint 2.0,” are said to target Bitcoin firms by cutting off their access to banking services.
Lummis warned, “The FDIC’s alleged actions are unacceptable and illegal,” calling for the preservation of all records dating back to January 2022 related to the agency’s digital asset activities. She outlined specific documents to preserve, including communications about Signature Bank, Silvergate Bank, and enforcement actions against Bitcoin firms.
The Senator also warned of potential criminal referrals to the Department of Justice if evidence of obstruction or document destruction is found.
Industry leaders have accused U.S. regulators of targeting the Bitcoin sector through backdoor measures similar to the Obama-era Operation Chokepoint. This newer iteration allegedly pressures banks to sever ties with Bitcoin firms, marginalizing the industry. Documents obtained via a Freedom of Information Act (FOIA) request last month revealed FDIC directives to banks in 2022 to “pause all crypto asset-related activity.”
Lummis’s actions aim to hold the FDIC accountable for alleged overreach and ensure transparency in its operations.
Senator Lummis will lead the newly established digital assets subcommittee under the Senate Banking Committee, alongside Chair Tim Scott (R-SC). Scott has outlined plans to develop a regulatory framework for digital assets, promote financial inclusivity, and explore innovative technologies like stablecoins.
The incoming Trump administration’s potential embrace of a U.S. Bitcoin reserve signals a significant shift in federal Bitcoin policy. However, it faces challenges, including legal barriers and opposition from lawmakers like Senator Elizabeth Warren (D-MA), who has been critical of digital assets.
As Bitcoin regulation takes center stage, the actions of key players like Lummis and Scott will likely shape the industry’s trajectory in the U.S.
Lummis’s bold move against the FDIC and U.S. Marshals underscores the growing political and legal battles surrounding digital assets. The Senator’s efforts reflect a broader push for transparency, regulatory reform, and the integration of Bitcoin into national financial strategies. Whether these efforts succeed will depend on the new administration's priorities and the balance of power in Congress.