FDIC Settles FOIA Lawsuit Over Crypto 'Pause Letters': Pays $188,440 and Drops Appeal

The Federal Deposit Insurance Corporation (FDIC) settled a FOIA lawsuit by agreeing to pay $188,440 in attorney's fees and dropping its appeal to withhold crypto-related "pause letters," ending a probe into alleged Operation Choke Point 2.0 tactics. The joint status report, filed February 3, 2026, acknowledged its prior blanket-withholding policy was不当 and will revise practices. The records, revealed in an October 2023 OIG report, showed the FDIC sending banks letters to pause or limit crypto activities. A November 2024 court ruling found the agency violated FOIA by redacting information in the pause letters. After four court orders and six productions, the FDIC agreed to liberalize its document review and add guidance to staff to liberally construe FOIA requests. The regulator will remit the fees and file a formal dismissal. The settlement reflects a policy shift away from categorical withholding of supervisory communications under Exemption 8.