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The move pulled by American cryptocurrency exchange Coinbase against the Federal Deposit Insurance Commission (FDIC) a few months ago may have finally paid off. The firm confirmed that the agency has started providing the requested information based on the Freedom of Information Act (FOIA).
According to Coinbase CLO Paul Grewal, the agency has made a U-turn. It has begun to provide information related to a FOIA request about the pause letters it sent to financial institutions. These letters are allegedly part of Operation Chokepoint 2.0. So far, Coinbase has received 20 such letters from the FDIC.
Alex DovbnyaAfter reviewing their content, the exchange concluded that the U.S. government agency is trying to cut off financial access to law-abiding American companies. Clear phrases instructed banks to cease providing crypto firms with banking services. Now, Coinbase is fully armed to request regulatory clarity from U.S. regulators regarding the broader crypto ecosystem.
In recent times, Coinbase is one of the crypto firms that has taken on American regulators in the fight for regulatory clarity for the industry.
How Coinbase and FDIC brawl started
In June, Coinbase filed a lawsuit against the United States Securities and Exchange Commission (SEC) and FDIC.
The exchange had reasons to believe that the government agencies were intentionally cracking down on crypto firms in the financial ecosystem. Coinbase accused both entities of pressuring banks not to do business with crypto asset service providers.
Arman ShirinyanPaul Grewal, Coinbase's CLO, mentioned that the exchange had approached the SEC for documents related to a close investigation into the regulator's stance and authority on crypto. Instead, the agency failed to respond to requests, including one linked to ConsenSys’ Ethereum securities case.
The FDIC followed in the footsteps of the SEC, denying Coinbase access to letters that it sent to financial institutions.
The incident ended up violating the Freedom of Information Act (FOIC). Ultimately, Coinbase decided to pursue a lawsuit with these agencies, citing that "Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry."
Alex Dovbnya
Vladislav Sopov
Dan Burgin
U.Today Editorial Team