The recent Freedom of Information Act (FOIA) requests made by Coinbase, a leading US-based crypto exchange, have brought to light more instances of the U.S. Federal Deposit Insurance Corporation (FDIC) instructing banks to freeze crypto services. This revelation sheds light on the government’s attempts to hinder the digital assets industry, debunking the idea that it was merely a conspiracy theory.
Paul Grewal, the chief legal officer at Coinbase, took to social media to share his findings, emphasizing that the FDIC’s actions were not just rumors. He highlighted the lack of transparency in the redacted documents and the agency’s failure to disclose the full extent of their directives to banks.
One particular example from the documents exposed FDIC assistant regional director Joseph A. Meade requesting a bank in Dallas, Texas, to halt its crypto activities in 2022. The reason cited was the FDIC’s uncertainty about the regulatory requirements for banks engaging in such activities.
Caitlin Long, the CEO of Custodia Bank, a crypto-friendly financial institution, criticized the FDIC’s actions, labeling them as covert attempts to undermine legitimate crypto businesses. She pointed out that the “pause letters” sent by the FDIC were essentially disguised cease and desist orders aimed at stifling lawful crypto operations.
In previous findings, Grewal unearthed 20 instances where the FDIC directed banks to cease their crypto-related activities without evidence of any wrongdoing. This has led Coinbase to file lawsuits against both the FDIC and the U.S. Securities and Exchange Commission (SEC), accusing them of conspiring to undermine the crypto industry.
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As the crypto industry continues to face regulatory challenges, the efforts of companies like Coinbase to hold government agencies accountable for their actions are crucial in ensuring a fair and transparent marketplace for digital assets.