Coinbase Accuses FDIC of Blocking Key Crypto Oversight Documents Amid Regulatory Dispute

Coinbase alleges that the FDIC is withholding vital documents tied to its crypto-related regulatory practices despite court orders. The exchange vows to challenge the agency’s alleged stalling tactics

Coinbase Takes on FDIC Over Alleged Crypto Oversight Misconduct

Coinbase, the prominent cryptocurrency exchange, has leveled serious accusations against the Federal Deposit Insurance Corporation (FDIC). The exchange claims the agency is obstructing access to key documents about its regulatory actions against crypto firms, despite a court order mandating disclosure.

At the heart of this dispute are the so-called “pause letters” reportedly sent by the FDIC to banks involved in crypto-related services. These letters allegedly urged financial institutions to suspend crypto operations pending regulatory reviews.

FDIC’s Limited Compliance Under Fire

Paul Grewal, Coinbase’s Chief Legal Officer, accused the FDIC of deliberately narrowing its document search to exclude additional pause letters that may exist. Grewal argued that this selective compliance undermines the court’s directive and limits transparency.

“Without telling us or the Court, FDIC limited their search for pause letters to only those ‘contained’ in the report — so other pause letters may exist,” Grewal stated.

Despite Coinbase’s push for broader disclosure, the FDIC reportedly claimed that addressing these requests would take over a year. This, Grewal noted, is emblematic of a larger pattern of obstructive behavior by the agency.

Allegations of Misconduct and Whistleblower Claims

Coinbase’s accusations extend beyond document withholding. Grewal cited whistleblower reports alleging improper document labeling, refusal to search key databases, and misuse of taxpayer funds for personal investigations, including scrutiny of Grewal himself.

The FDIC has yet to respond publicly to these allegations, further fueling Coinbase’s claims of systemic obstruction.

Political Pressure Mounts

The controversy has garnered political attention, with Senator Cynthia Lummis accusing the FDIC of attempting to conceal its role in “Operation Chokepoint 2.0.” This term refers to alleged efforts by regulatory bodies to target crypto firms through undue pressure on financial institutions.

Lummis called for immediate preservation of all digital asset-related documents, warning that the FDIC might destroy critical evidence.

“The FDIC is attempting to hide Operation Chokepoint 2.0, and the FDIC must preserve all documents related to digital assets immediately,” Lummis stated.

Coinbase’s Next Steps

Coinbase plans to escalate its FOIA complaints, aiming to uncover the full extent of the FDIC’s actions. Grewal reaffirmed the exchange’s commitment to holding the agency accountable, emphasizing that Coinbase would not back down.

“If FDIC thinks they can win in a staring contest against Coinbase or the industry, they clearly underestimate us and our commitment to the law,” he said.

A Pivotal Moment for Crypto Regulation

The escalating dispute between Coinbase and the FDIC highlights ongoing tensions in the evolving regulatory landscape for digital assets. As Coinbase fights for transparency, the case could set significant precedents for how regulators handle crypto oversight moving forward.

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