2 weeks Ago By Kamya Pandey
Explainer Briefly Slides Crypto exchange Coinbase says that the US Federal Deposit Insurance Corporation (FDIC) sent letters to financial institutions instructing them not to offer crypto banking services. In a series of posts on X (formerly Twitter), Coinbase’s Chief Legal Officer Paul Grewal said that FDIC did this as part of “Operation Chokepoint 2.0” under which it was instructing banks to not engage in crypto offerings.
Coinbase made a Freedom of Information (FOI) Request to the FDIC asking for details of the letters. However, when the company didn’t get access to the letters, it sued FDIC and as of November 4, the court approved Coinbase’s demand for the letters. For context, the original operation chokepoint was an initiative by the US Department of Justice in 2013 .
Under this operation, the US government investigated banks that provided services to fraudsters. Grewal, and others such as crypto exchange Gemini’s co-founder Tyler Wilkenvoss, argue that the government is carrying out a similar initiative with respect to crypto services as well. In record time, the judge in our @FDICgov FOIA case has ordered the agency to produce the Operation Chokepoint 2.
0 pause letters. We appreciate the Court’s consideration. Some much needed sunlight is on its way.
pic.twitter.com/E2PHjVuHHg Grewal says that Coinbase has found 20 instances where FDIC told banks to pause crypto services.
Contents of the letters: As per the company’s exhibit in court , the letter exchange between FDIC and banks focused on: While Coinbase doesn’t have full access to the various letters’ contents, Grewal argues that “in short, the contents are a shameful example of a government agency trying to cut off financial access to law-abiding American companies.” He added that regulators need to ensure transparency in their actions instead of “working behind a bureaucratic curtain”. Coinbase’s ongoing demand for crypto regulation: Besides the FDIC lawsuit, Coinbase is also involved in a legal battle against the US Securities and Exchange Commission (SEC) urging it to make rules for crypto regulation.
The company says that the SEC has not created a clear pathway for crypto exchanges to register themselves with the regulator. The company has submitted two different registration models to the SEC asking it to review them, but the SEC has not responded to the same. Also read:.
