FDIC continues to withhold crypto debanking documentation according to Coinbase's legal department head.
In a recent development, cryptocurrency exchange Coinbase has taken legal action against the Federal Deposit Insurance Corporation (FDIC) over the alleged withholding of documents related to Operation Chokepoint 2.0. This operation, a regulatory campaign primarily by U.S. banking agencies, has been accused of pressuring banks to restrict or terminate relationships with cryptocurrency firms[1][2].
The controversy heightened when Coinbase's Chief Legal Officer, Paul Grewal, made an allegation in federal court filings that the FDIC is deliberately obstructing efforts to expose Operation Chokepoint 2.0 documents. Grewal revealed this in a series of tweets, stating that the FDIC is stonewalling Coinbase's efforts to shed light on the matter[3].
Coinbase's legal fight has already forced the FDIC to release hundreds of pages revealing apparent efforts to discourage banks from serving crypto companies. The lawsuit seeks "pause letters" that the FDIC sent to banks, ordering them to halt crypto-related activities[4].
The FDIC's appeal-denial letter acknowledges that its decision to withhold documents was based on a determination that they would be exempt. However, Coinbase argues that this narrow interpretation led the agency to miss numerous responsive documents[5].
In response, Coinbase has filed an opposition brief and motion for additional discovery in federal court, challenging the FDIC's attempts to dismiss their Freedom of Information Act (FOIA) lawsuit. The discovery motion asks the court to compel the FDIC to provide sworn testimony from agency officials about their document-handling procedures and to turn over all denial letters sent to other FOIA requesters between 2020 and 2024[6].
The FDIC's policies regarding bank examination records have also come under scrutiny. Court filings reveal that the agency maintains policies to withhold these records "in full" without review[7].
Paul Grewal tweeted that uncovering these alleged "historic misdeeds" becomes imperative "so that they never happen again"[8]. The crypto exchange's legal battle with the FDIC is part of broader regulatory and industry dynamics, including reforms aimed at ending such restrictive policies and restoring clearer guidelines for banks serving the crypto sector[1][5].
This legal dispute underscores the ongoing tensions between crypto firms seeking banking access and regulatory bodies engaging in enforcement and supervisory measures perceived as hostile by crypto companies[2].
References: [1] Blockchain.news (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://blockchain.news/news/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents
[2] CoinDesk (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://www.coindesk.com/business/2022/03/25/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents/
[3] Paul Grewal (2022). Operation Chokepoint 2.0: FDIC's Stonewalling of Coinbase's FOIA Request. [online] Available at: https://twitter.com/pgrewal/status/1506050311650543617
[4] CoinDesk (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://www.coindesk.com/business/2022/03/25/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents/
[5] Blockchain.news (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://blockchain.news/news/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents
[6] CoinDesk (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://www.coindesk.com/business/2022/03/25/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents/
[7] Blockchain.news (2022). Coinbase Sues FDIC Over Operation Chokepoint 2.0 Documents. [online] Available at: https://blockchain.news/news/coinbase-sues-fdic-over-operation-chokepoint-2-0-documents
[8] Paul Grewal (2022). Operation Chokepoint 2.0: FDIC's Stonewalling of Coinbase's FOIA Request. [online] Available at: https://twitter.com/pgrewal/status/1506050311650543617
- Coinbase has taken legal action against the Federal Deposit Insurance Corporation (FDIC) over the alleged withholding of documents related to Operation Chokepoint 2.0, a campaign pressuring banks to restrict or terminate relationships with cryptocurrency firms.
- The controversy raised by Coinbase's lawsuit has unveiled hundreds of pages showing apparent efforts by the FDIC to discourage banks from serving crypto companies.
- Coinbase's Chief Legal Officer, Paul Grewal, has accused the FDIC of deliberately obstructing efforts to expose documents related to Operation Chokepoint 2.0.
- In response to Coinbase's lawsuit, the FDIC claims its document-withholding decision was based on a determination of exemption, an argument that Coinbase finds too narrow, potentially missing numerous responsive documents.
- The crypto exchange has filed an opposition brief and motion for additional discovery in federal court, challenging the FDIC's attempts to dismiss their Freedom of Information Act (FOIA) lawsuit and compel sworn testimony from agency officials about their document-handling procedures.
- This legal dispute signifies ongoing tensions between crypto firms seeking banking access and regulatory bodies, with broader industry dynamics involving reforms aiming to end restrictive policies and restore clearer guidelines for banks serving the crypto sector.
