According to Coinbase chief legal officer Paul Grewal, the letters showed that a US government debanking effort “wasn’t simply some crypto conspiracy theory.”
In a FOIA action against the US Federal Deposit Insurance Corporation (FDIC), court papers indicated the regulator instructed certain financial institutions to halt crypto banking.
The US District Court for the District of Columbia revealed redacted “pause letters” from FDIC officials to US bank boards of directors on Dec. 6.
Due to unknown digital asset rules, the FDIC advised banks to “pause any crypto asset-related activity” in 2022 letters.
Some letters said that the FDIC would contact all FDIC-supervised institutions later when it determines the supervisory expectations for crypto asset-related activities, including regulatory filings.
The submission was part of History Associates’ June FOIA complaint. Coinbase, which is under SEC enforcement, engaged the business to submit a FOIA request to the FDIC on concerns about debanking crypto companies. Denying the request led to the lawsuit.
Other letters in the Dec. 6 filing advised banks to furnish information before adding services. Despite redactions, several FDIC communications revealed banking institutions were exploring cryptocurrency activity.
Coinbase chief legal officer Paul Grewal said on Dec. 6 on X that “[T]he letters that reveal Operation Chokepoint 2.0 weren’t just some crypto conspiracy theory. The FDIC is still hiding behind extremely overbroad redactions.”
Many in the sector call the US government’s push on banks to break links with crypto businesses Operation Chokepoint 2.0.
The 2013–2017 Operation Choke Point targeted banks engaging with payday lenders and other high-risk operations.
Five high-profile crypto CEOs claimed on social media in November that banks had threatened to terminate their accounts in 2023 owing to their links to digital assets.
Coinbase CEO Brian Armstrong remarked on Nov. 27 that the FDIC FOIA request was still underway but might reveal government officials’ lawbreaking.
FDIC chief Martin Gruenberg will resign on Jan. 19, one day before Donald Trump takes office. Trump has not named a regulatory body leader at publishing.
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