Coinbase Accuses FDIC of Withholding Crucial Documents in FOIA Requests
Coinbase, a leading cryptocurrency exchange, has accused the Federal Deposit Insurance Corporation (FDIC) of blocking access to important documents related to its Freedom of Information Act (FOIA) requests. The exchange alleges that the FDIC is withholding key information despite a court ruling requiring disclosure.
The controversy stems from the FDIC’s alleged issuance of “pause letters” to banks involved in cryptocurrency-related services. These letters reportedly advised financial institutions to pause their crypto operations until the agency completed regulatory reviews. While Coinbase managed to obtain some of these letters through legal action, the exchange claims that the FDIC intentionally limited its document search.
Paul Grewal, Coinbase’s Chief Legal Officer, criticized the FDIC’s handling of the FOIA requests, stating that the agency restricted its search to only those pause letters explicitly mentioned in a previous report. Grewal believes that additional pause letters may exist, but the FDIC refused to conduct a broader review, citing time constraints.
Grewal described the FDIC’s actions as obstructive and accused the agency of failing to comply with the court’s directive. He emphasized Coinbase’s commitment to uncovering the full extent of the FDIC’s involvement in impeding crypto innovation.
The situation has caught the attention of lawmakers, with Senator Cynthia Lummis criticizing the FDIC for allegedly attempting to conceal “Operation Chokepoint 2.0,” a term used to describe efforts to target crypto firms through regulatory pressure. Lummis called for the preservation of all materials related to digital assets to prevent the destruction of crucial documents.
In response to these challenges, Coinbase plans to expand its FOIA complaints to address what it perceives as FDIC violations. The exchange remains steadfast in its mission to hold the agency accountable. Grewal affirmed that Coinbase is prepared to continue the fight, stating that the company and its legal team are committed to upholding the law.
The ongoing dispute between Coinbase and the FDIC highlights the challenges faced by cryptocurrency firms in navigating regulatory hurdles. As the crypto industry continues to evolve, organizations like Coinbase are taking a stand to ensure transparency and accountability within the regulatory landscape.