Coinbase Files FOIAs Against US Regulators Probing Banks’ Bitcoin Crackdown

The exchange asked regulators to disclose documents relating to an ongoing crackdown on crypto companies among US banks. Coinbase Files FOIAs Against US Regulators Probing Banks’ Bitcoin Crackdown

Coinbase has filed two Freedom of Information Act (FOIA) requests against United States regulators demanding they disclose, among other things, information about the ongoing cryptocurrency crackdown among US banks, according to Paul Grewal, Coinbase’s chief legal officer.

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The Federal Deposit Insurance Corporation (FDIC), the US agency insuring bank deposits, has reportedly asked banks to cap deposits from crypto companies at 15% of total deposits.

“We filed two new sets of FOIA requests in our continued effort to get any sort of clarity on how regulatory agencies are approaching digital assets,” Grewal said in an Oct. 21 post on the X platform.

“The first is for documents about a digital asset deposit cap [by the FDIC] and other banking regulators have been imposing on financial institutions,” Grewal said.

Coinbase filed a second FOIA request to learn more about how regulators responded to other crypto-related FOIAs in the past, he added.

The FDIC purportedly imposed the deposit caps without first soliciting public comment, which is generally a requirement for banking regulators under US law.

“Each [FOIA request] is separate from our FOIA filings from over a year ago that are now the subject of federal lawsuits,” Grewal said.

In June, Coinbase filed lawsuits against the US Securities and Exchange Commission and the FDIC for allegedly refusing to comply with previous requests for public disclosures.

In 2023, Coinbase asked the SEC to divulge documents relating to the agency’s classification of Ether.

The SEC filed charges against Coinbase in 2023 for allegedly violating securities laws with its ETH staking-as-a-service offering.

Spot ETH is classified as a commodity by US regulators but the regulatory status of ETH staking pools is uncertain.

Coinbase also sent FOIAs to the FDIC demanding information about “pause letters” the agency purportedly sent to banks demanding they slow down the growth of crypto-related banking activities.

Stand with Crypto, Coinbase’s project advocating for “common-sense” digital asset regulation, launched a political action committee (PAC) in March to support pro-crypto candidates.

The November US presidential election pits Republican nominee Donald Trump, who has said he wants to make America “the crypto capital of the world,” against Democrat Kamala Harris, who has been comparatively quiet on the industry.

United States Vice President Harris is friendlier toward crypto than her boss, President Joe Biden, but not as pro-industry as rival and former President Trump, Galaxy Research said on Oct. 14.

Updated: 11-2-2024

Coinbase Finds Over ’20 Examples’ Of FDIC Telling Banks To Avoid Bitcoin

Coinbase’s chief legal officer declares that the “contents are a shameful example of a government agency trying to cut off financial access to law-abiding American companies.”

Cryptocurrency exchange Coinbase has discovered “over 20 examples” of the United States regulator advising US banks to steer clear of crypto-related banking services, according to its chief legal officer.

The discovery follows Coinbase filing two Freedom of Information Act (FOIA) requests against the Federal Deposit Insurance Corporation (FDIC) — the US agency insuring bank deposits — demanding they disclose information about the ongoing crypto crackdown among US banks.

Public ‘Deserves Transparency,’ Says Coinbase CLO

“So far, we’ve uncovered more than 20 examples of the FDIC telling banks to “pause” or “refrain from providing” or “not proceed” with offering crypto-banking services,” Coinbase chief legal officer Paul Grewal claimed in a Nov. 1 X post.

Grewal declared that the public “deserves transparency, not an agency that’s working behind a bureaucratic curtain.”

Commenting on the descriptions of letters submitted by FDIC in the Nov. 1 court filing, Grewal wrote that “the contents are a shameful example of a government agency trying to cut off financial access to law-abiding American companies.”

FDIC Cast Doubt Over Banks’ Risk Assessment

The court filing summarizes 23 documents detailing instances where the FDIC questioned banks’ risk assessments regarding crypto services, advising them to hold off on offering such services until a review is completed.

Most of the cases provided were similar. In one case, outlined in “Document 5,” the FDIC reportedly called a meeting with a bank to scrutinize its crypto services.

Despite the bank providing further documentation after the meeting, the FDIC allegedly raised additional “questions” and advised the bank, “Until such review is completed, the bank should not expand the service to additional customers.”

Meanwhile, on Oct. 30, Cointelegraph reported that Coinbase is “prepared to work with either administration” in the US, whether Democratic candidate and Vice President Kamala Harris or Republican Donald Trump wins the presidency, ahead of the election on Nov. 5.

Coinbase Files FOIAs Against US Regulators Probing Banks’ Bitcoin Crackdown

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