Coinbase FOIA Requests Unearth More Instances of U.S. FDIC Asking Banks To ‘Pause’ Crypto Services

Top US-based crypto exchange Coinbase’s Freedom of Information Act (FOIA) requests are uncovering more instances where the U.S. Federal Deposit Insurance Corporation (FDIC) asked banks to freeze crypto services.

In a new thread on the social media platform X, Coinbase chief legal officer Paul Grewal says the revealed information confirms the notion that the US government was attempting to undermine the digital assets industry was not a conspiracy theory.

“The letters that show Operation Chokepoint 2.0 wasn’t just some crypto conspiracy theory. FDIC is still hiding behind way overbroad redactions. And they still haven’t produced more than a fraction of them.”

One example included in the documents reveals FDIC assistant regional director Joseph A. Meade asking an unnamed bank in Dallas, Texas, to pause its crypto activities in 2022 because the FDIC “has not determined what, if any, regulatory filings will be necessary for a bank to engage in this type of activity.”

Caitlin Long, the founder and chief executive of crypto-friendly bank Custodia Bank, took to X to say that the FDIC’s actions were disguised ways to legally cripple law-abiding crypto institutions.

“These ‘pause letters’ date back to March 11, 2022 – two years and nine months ago…these weren’t “pause letters” because the pause was indefinite. These were really ‘cease and desist’ letters cloaked in legalese…designed to crush law-abiding crypto.”

Last month, Grewal also uncovered 20 instances where the FDIC instructed banks to cease crypto activities without any evidence that they committed crimes.

Coinbase sued the FDIC and the U.S. Securities and Exchange Commission (SEC) earlier this year, claiming that the agencies were attempting to undermine the crypto industry.

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