Coinbasehasreceivedover20FDIC‘pauseletters’instructingbankstohaltcryptoservices.
CoinbasefiledFOIAlawsuitsagainsttheFDICandSECforcryptoregulatoryclarity.
FDICstartsreleasingdocumentstoCoinbasefollowingalegalpushfortransparency.
CoinbaseGlobalInc.hasescalateditspursuitofclarityfromUSregulators,especiallytheFederalDepositInsuranceCorporation(FDIC),initseffortsfortransparencyincryptocurrencyregulation.ThecompanyrecentlyreportedthattheFDICstarteddisclosinginformationaspartofCoinbase’sFreedomofInformationAct(FOIA)request,markingashiftintheregulatoryagency’spreviousstance.
AsperCoinbaseCLOPaulGrewal,thisprovidesinformationonhowtheagencyhasrestrictedbankingforcryptofirms.GrewaldisclosedonXthatCoinbasehasrampeduprequestsforrecordsfromtheFDIC,whichshowsthattheregulatorconcealstheinformationthatcouldexplainitspositiononcryptocurrencies.
Slowlybutsurely,thepictureisbecomingclear.Afterwesued,@FDICgovfinallystartedgivingusinformationrelatedtoourFOIArequestaboutthepauselettersitsenttofinancialinstitutionsaspartofOperationChokepoint2.0.Inshort,thecontentsareashamefulexample…
—paulgrewal.eth(@iampaulgrewal)November1,2024
CoinbasesupportsclarifyingthelegalframeworkfortheindustryintheUnitedStates,statingthatsuchstandardsshouldcoincidewiththecurrentlegislation.
Coinbase’sFOIARequestsReveal‘PauseLetters’fromFDIC
Coinbase’slegalbattlewithregulatoryauthoritiesbeganinJunewhenthecompanyfiledaFOIAlawsuitagainsttheFDICandtheSecuritiesandExchangeCommission(SEC).Theexchangesoughttouncoverdocuments,specifically“pauseletters,”whichallegedlyinstructedbankstoceaseprovidingservicestocryptocurrencybusinesses.Theseletters,whichCoinbaselinkedtoOperationChokepoint2.0,underscorethecompany’sclaimthatU.S.financialregulatorshaveusedmultiplestrategiestocurbthedigitalassetindustry’saccesstotraditionalfinancialservices.
GrewalstatedthatCoinbasehasreceivedover20suchlettersfromtheFDIC,whichincludedirectivesurgingbankstohalt,pause,oravoidofferingcrypto-bankingservices.AccordingtoCoinbase,thesefindingsindicateacoordinatedapproachtorestrictingaccesstofinancialservicesforcrypto-focusedfirms.Thecompany’sdiscoveryhasfueledfurthercallsfortransparencywithinregulatoryframeworks,especiallyconcerningthecryptocurrencysector’scompliancewithestablishedfinancialstandards.
CallsforTransparencyandtheImpactonU.S.CryptoPolicy
CoinbasehascriticizedtheSECandFDIC’sregulatoryactions,accusingtheagenciesofdisproportionatelytargetingcryptofirms.Recently,CoinbasefiledadditionalFOIArequestswiththeFDIC,seekingdocumentsonpotentialrestrictionsonthevolumeofdigitalassetsheldbydepositoryinstitutions.TheexchangehasalsopursuedrelatedlawsuitstocompeltheSECandFDICtoclarifytheirregulatorystanceoncryptocurrencies.
Coinbase’slegalactionsagainsttheSECandFDIChavebroaderimplicationsforthedigitalassetsector.InitsFOIAlawsuits,Coinbasehasarguedthatregulatoryagenciesoperateundera“bureaucraticcurtain,”underminingtransparencyandinhibitingthecryptosector’spotentialwithintheU.S.financialsystem.Coinbasebelievestheconsistentwithholdingofinformationandregulatorypressureonbankstosevertieswithcryptoclientsstifletheindustry’sabilitytothrive.
TheBlockchainAssociation,anindustrygroupadvocatingforcryptointerests,recentlyreportedsubstantialfinancialburdensoncryptocompaniesduetotheSEC’sapproachunderChairGaryGensler.
cryptonewsland.com