After a Legal Tussle, Coinbase Wins Right to More Documents The biggest development has come in when Coinbase finally got two more unredacted documents from the Federal Deposit Insurance Corporation. These were released under a Freedom of Information Act request after months of legal wrangling.
The letters, known as “pause letters,” provide rare insight into the thinking of the FDIC on cryptocurrency activities. They show that the agency instructed banks to stop crypto-related activities in what appeared to be a conscious effort to prevent U.S. banks from engaging with crypto companies in 2022.
News of the same was announced by Coinbase’s Chief Legal Officer, Paul Grewal on X, formerly known as Twitter: “FDIC magically found TWO more pause letters in this search after saying before that it had complied with an earlier Court order.”
Judge Criticizes FDIC for Noncompliance
On December 12, 2024, Judge Ana C. Reyes admonished the FDIC for over-redacting previously released documents and failing to fully comply with the orders of the court. She ordered the agency to make “more thoughtful redactions” and provide greater transparency by releasing the requested documents.
In that regard, two new letters released due to the compliance by FDIC have shown that banks were asked to stand down on all crypto asset-related activities. The result has been delays in launching crypto services and further confusion about what will be required for regulatory compliance.
Implications for Regulatory Transparency
The publication of the documents has reignited debates over the transparency and accountability of U.S. regulatory agencies in the cryptocurrency sector. Critics have likened such moves to “Operation Chokepoint,” a controversial 2013 program that targeted banks and payment processors serving high-risk industries.
Dubbed “Operation Chokepoint 2.0,” this new version is part of a broader pattern of regulatory scrutiny the crypto industry has been facing. The “pause letters” have been viewed as confirmation the FDIC is involved in the broader push.
Grewal has called on immediate congressional hearings to have lawmakers investigate the FDIC’s practices. “The new Congress should launch hearings on all this without delay,” Grewal said on X.
With the regulatory landscape continuing to shift, industry players and policymakers alike are further pushing for a clearer set of guidelines that balances innovation with oversight under a new presidential administration.
