Coinbase Vows Legal Action as FDIC Faces Scrutiny Over Crypto
Coinbase has accused the Federal Deposit Insurance Corporation (FDIC) of blocking access to important documents related to its Freedom of Information Act (FOIA) regarding the financial regulator’s overreach against cryptocurrency companies.
The cryptocurrency exchange claims that the FDIC withheld critical information despite a court ruling requiring disclosure.
Coinbase challenges FDIC for allegedly hiding ‘standstill letter’
On January 17, Coinbase Chief Legal Officer Paul Grewal criticized the FDIC’s handling of its FOIA request. The dispute centers on letters sent by the FDIC to banks involved in cryptocurrency-related services.
The letters reportedly suggested Financial institution halts its crypto operations until the agency completes its regulatory review. While Coinbase successfully obtained some of these documents through legal proceedings, Grewal claimed that the FDIC intentionally limited its document search.
He suggested there may be more suspension letters, but the agency limited its efforts to those explicitly mentioned in previous reports. The request for a broader review was denied, and the FDIC reportedly said it would take a year or more to fulfill the request.
“Without telling us or the court, the FDIC limited its search for suspension letters to what was ‘contained’ in the report, so there may have been other suspension letters. When we asked them to amend their so-called ‘reasonable explanation’ and stop playing A play on words, they told us it would take at least a year,” Grewal said point out.
Grewal described the situation as part of a larger pattern of obstructive behavior. He accused the FDIC of failing to comply with the court order. He also emphasized Coin library remains committed to exposing the full scope of the agency’s involvement in hindering cryptocurrency innovation.
Grewal also highlighted whistleblower allegations Misconduct Within the FDIC. The charges include improper labeling of documents, refusal to search certain databases and misuse of taxpayer funds to investigate individuals, including himself. The FDIC reportedly did not respond when Coinbase sought clarification on the issues.
This situation has attracted the attention of legislators. Senator Cynthia Loomis Recent criticism of the FDIC, accusing it of trying to conceal “Operation Choke Point 2.0” is a term used to describe alleged efforts to target cryptocurrency companies through regulatory pressure.
Loomis warned that the agency may destroy documents related to the incidents. The MP called for the immediate preservation of all materials related to digital assets.
“FDIC is trying to hide Operation Choke Point 2.0, FDIC must immediately preserve all documents related to digital assets,” Lawmaker point out.
In response to these challenges, Coinbase plans to expand its FOIA complaint to address what it considers FDIC violations. The exchange remains steadfast in its mission to hold the agency accountable. Grewal confirmed that Coinbase will not let up and said that the company is fully prepared to continue fighting.
“I wouldn’t presume to speak on behalf of the courts or Congress. But if the FDIC thinks they can prevail in serious competition with Coinbase or the industry at large, then they are clearly underestimating us and our commitment to the law. We are not going anywhere. We are ‘s lawyers aren’t going anywhere,” Grewal draw conclusions.
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