Coinbase Chief Legal Officer Paul Grewal says the Federal Deposit Insurance Corporation (FDIC) has asked banks to “suspend,” “withhold” or “not continue” to provide cryptocurrency-related banking services. Cryptocurrency exchanges have discovered more than 20 cases of this.
In the X post, Grewal wrote:
“In short, what it says is a shameful example of a government agency attempting to cut off financial access to law-abiding American businesses.”
This discovery was made after the FDIC shared 23 documents with Coinbase pursuant to two Freedom of Information Act (FOIA) requests. Coinbase had requested access to the letter the FDIC sent to banks suspending cryptocurrency services.
The FDIC has not yet released the actual letter, but a shared document provides a summary. The letters were dated from March to October 2022 and were addressed to bank presidents and boards of directors. The name of the bank was not disclosed.
In each letter, the FDIC said it was reviewing the banks' proposed virtual currency services and recommended that banks refrain from offering such services until the review was complete. In most cases, the FDIC was concerned with “bank legal analysis, evaluation of compliance with FDIC regulations, safety and soundness, and consumer protection.”
In nearly every letter, the FDIC states that more information is needed to determine whether the proposed cryptographic services are secure. Grewal said the FDIC sent the letter to banks as part of Operation Chokepoint 2.0.
Grewal said Coinbase will continue to “obtain clarity” from regulators through FOIA requests and “any other means necessary.” He added:
“The public deserves transparency, not government agencies operating behind a curtain of bureaucracy.”
Earlier this week, Coinbase said in a letter to shareholders for the third quarter of 2024 that whether Vice President Kamala Harris or Republican candidate Donald Trump wins the Nov. 5 election, it will “work with either administration.” I am prepared to do so.”
This is because Coinbase believes that both presidential candidates have a crypto-friendly stance. The letter dated October 30th read as follows:
“Both presidential candidates, as well as politicians across the board, are taking a more favorable position on cryptocurrencies, which is a significant change from previous years.”
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