Coinbase alleges that the Federal Deposit Insurance Corporation (FDIC) is preventing them from obtaining essential records related to their Freedom of Information Act (FOIA) inquiries, which concern the financial regulator’s excessive interference in cryptocurrency companies.
According to the cryptocurrency exchange, they claim the Federal Deposit Insurance Corporation has been hiding crucial details even though a court decision mandated transparency.
Coinbase Challenges FDIC Over Alleged Hidden ‘Pause Letters’
On January 17th, Paul Grewal, the Chief Legal Officer at Coinbase, expressed his concerns about how the Federal Deposit Insurance Corporation (FDIC) managed their Freedom of Information Act (FOIA) requests. The dispute revolves around the letters the FDIC sent to banks offering cryptocurrency-related services.
The letters apparently directed banks to temporarily cease dealing with cryptocurrencies until the relevant authority had finished conducting regulatory checks. Although Coinbase managed to acquire certain documents via legal means, Grewal alleges that the Federal Deposit Insurance Corporation intentionally narrowed their scope of document retrieval.
He proposed the possibility of extra silent letters in addition to those already known, yet the organization chose to focus solely on those specifically listed in an earlier document. Inquiries for a comprehensive re-evaluation were turned down, as it was said that executing such a request would require at least a year or more. The FDIC is said to have been the agency denying these requests.
Grewal pointed out that the FDIC restricted their search for ‘pause letters’ solely to those within the report, implying there might be other such letters. When we asked them to reconsider their ‘reasonable interpretation’ and stop engaging in semantic games, they responded it would take at least a year.
Grewal pointed out that the situation was just one example of a broader trend of obstructive actions. He alleged that the FDIC had not followed the court’s instructions. Moreover, he underscored that Coinbase remains dedicated to discovering the complete extent of the agency’s role in hindering the progress of cryptocurrency innovation.
Additionally, Grewal brought attention to accusations of wrongdoing within the FDIC made by a whistleblower. These accusations involve mislabeling documents, neglecting to search certain databases, and allegedly using taxpayer money to scrutinize individuals, including himself. When Coinbase inquired about these matters, it was reported that the FDIC did not provide a response.
1. The current predicament has caught the eye of legislators. Senator Cynthia Lummis recently voiced her disapproval towards the FDIC, claiming that they are trying to disguise “Operation Chokepoint 2.0.” This term refers to perceived attempts to control crypto businesses by applying regulatory strain.
As an analyst, I find myself expressing concerns about potential document destruction regarding recent incidents by the agency. It’s crucial that all relevant digital assets-related materials are promptly preserved.
A lawmaker declared that the Federal Deposit Insurance Corporation (FDIC) is trying to conceal the details of Operation Chokepoint 2.0, and they emphasized the need for the FDIC to save all papers concerning digital assets promptly.
In response to these issues, Coinbase intends to broaden its Freedom of Information Act complaints to tackle what it perceives as breaches by the FDIC. The exchange remains steadfast in its commitment to ensure the agency is held accountable. Grewal confirmed that Coinbase will not back down, emphasizing that the company is fully prepared and ready to carry on this battle.
Grewal made it clear that he doesn’t represent the Court or Congress, but if FDIC believes they can outlast Coinbase or the industry in a standoff, they may be underestimating us and our dedication to upholding the law. We’re here to stay. And our legal team will remain just as steadfast.
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2025-01-18 16:54