Chokepoint 2 unredacted "most egregious overreach" AI citations:
The documents provided reveal several instances of potential government overreach by the FDIC in relation to banks' crypto-related activities. Here are some of the most egregious excerpts:
1. Blanket pause on crypto activities:
"As a result, we respectfully ask that you pause all crypto asset-related activity."[1]
This request for a complete halt on crypto-related activities, without specific legal grounds or tailored to individual bank circumstances, could be seen as overreaching.
2. Preemptive restrictions on expansion:
"Until that review is completed, [REDACTED] should not expand the service to additional customers."
The FDIC is limiting a bank's business operations before completing its review, potentially overstepping its regulatory bounds.
3. Vague regulatory expectations:
"The FDIC will notify all FDIC-supervised banks at a later date when a determination has been made on the supervisory expectations for engaging in crypto asset-related activity, including the need for any regulatory filings."[1]
This statement suggests the FDIC is restricting activities without clear regulatory guidelines in place, which could be seen as arbitrary and overreaching.
4. Extensive questioning and documentation requests:
"The FDIC has a number of questions based on the information provided to date. We expect you to satisfactorily address them (in advance of implementation) to ensure the bank is operating in a safe and sound manner."
While oversight is necessary, the extent of questioning and documentation requests before allowing implementation could be viewed as excessive regulatory burden.
5. Interference with third-party agreements:
"Please notify us of any material change from the arrangement as described to the FDIC, including, but not limited to, expanding the service to include any clients, transactions or activities outside of the bank, such as through [REDACTED]."
This level of involvement in a bank's third-party arrangements could be seen as overstepping regulatory authority.
These excerpts demonstrate a pattern of the FDIC exercising broad authority to restrict and scrutinize crypto-related activities in banks, potentially beyond their established regulatory mandate.