Coinbase Secures Release of Unredacted FDIC Documents

Coinbase has successfully obtained the release of additional unredacted documents from the Federal Deposit Insurance Corporation (FDIC) following a prolonged Freedom of Information Act (FOIA) request battle.

The FDIC has released two more pages of documents, referred to as “pause letters,” which reveal the agency’s advice to banks to halt activities related to cryptocurrencies in 2022. These letters suggest that the FDIC deliberately limited U.S. banks’ involvement with crypto businesses during that period.

Operation Chokepoint 2.0 and Regulatory Tensions

The actions outlined in the documents are part of what many describe as “Operation Chokepoint 2.0,” highlighting the ongoing tensions between U.S. regulators and the crypto industry. The term is inspired by the original “Operation Choke Point,” a U.S. Department of Justice initiative launched in 2013, targeting banks and payment processors working with industries deemed high-risk or unsavory.

Note that FDIC magically found TWO more pause letters in this search after saying before that it had complied with an earlier Court order. It’s hard to believe in their good faith when their sweater further unravels every time we pull on the thread.

Coinbase Chief Legal Officer Paul Grewal shared the documents on X, stating that they show a coordinated effort to stop a wide variety of crypto activity, from basic Bitcoin transactions to more complex offerings.

FDIC’s Noncompliance and Regulatory Clarity Debate

On December 12, 2024, Judge Ana C. Reyes criticized the FDIC for excessive redactions and noncompliance with earlier court orders, instructing the agency to make “more thoughtful redactions” and release additional letters. The FDIC subsequently disclosed two previously undisclosed letters, raising questions about the agency’s transparency.

The released documents show that banks were asked to pause all crypto asset-related activities, causing delays in launching crypto services while addressing unclear compliance requirements. This development adds to a growing debate over regulatory clarity and the role of federal agencies in shaping the crypto landscape.

Key Takeaways:

  • The FDIC released two more pages of unredacted “pause letters” following a FOIA request battle with Coinbase.
  • The documents reveal the agency’s advice to banks to halt cryptocurrency-related activities in 2022.
  • The actions are part of what many describe as “Operation Chokepoint 2.0,” highlighting tensions between U.S. regulators and the crypto industry.
  • The development adds to a growing debate over regulatory clarity and the role of federal agencies in shaping the crypto landscape.

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