Coinbase Claims Proof of U.S. Government’s Secret War on Crypto
Coinbase made a bold declaration on Friday, asserting that newly disclosed correspondences between the Federal Deposit Insurance Corporation (FDIC) and member banks provide evidence that the U.S. government has been covertly waging a war on cryptocurrency for years.
The documents in question shed light on the communication between the FDIC and American banks regarding crypto activities. In response to a Freedom of Information Act (FOIA) request filed by Coinbase, the FDIC released 23 letters sent to member banks in 2022, revealing the agency’s stance on regulating crypto-related products and services.
These letters, although heavily redacted, show that the FDIC urged banks to refrain from engaging in crypto activities until proper regulations were established. In one instance, a bank was instructed to “pause all crypto asset-related activity” in March 2022. This directive was reportedly issued to multiple banks across the country throughout the year.
While it was previously known that the FDIC required banks to inform the agency of any plans to engage in crypto activities, the extent of the agency’s instructions to halt such activities was not clear. The letters indicate that the FDIC intended to review the permissibility of crypto-related activities before allowing banks to proceed, but it remains unclear whether this review was ever completed.
Coinbase’s Chief Legal Officer, Paul Grewal, celebrated the revelations, suggesting that they validate the existence of “Operation Chokepoint 2.0.” This theory posits that the U.S. government has not only discouraged financial institutions from dealing with crypto but has also targeted crypto companies and executives by debanking them to stifle the industry.
While the FDIC letters do not explicitly mention debanking practices, some believe that banks may have frozen the accounts of crypto-related entities to comply with the agency’s directives. This uncertainty could have led to instances of debanking within the crypto industry, as several industry leaders have shared their experiences of losing access to banking services.
Despite the lack of direct evidence linking debanking to government directives in the FDIC letters, industry leaders remain determined to uncover any potential connections. The ongoing scrutiny of these revelations underscores the industry’s commitment to transparency and accountability in the face of regulatory challenges.
As the crypto community continues to navigate the complexities of government regulation, the need for clarity and fair treatment remains paramount. Coinbase and other industry stakeholders are resolute in their pursuit of a level playing field for law-abiding businesses operating in the crypto space.