Coinbase Backs Case Over FDIC's Missing Crypto Documents

Crypto News Regulation

Coinbase Backs Lawsuit Over FDIC's Missing Crypto Documents

Written by Aaron S.,

Editor-In-Chief

Last Updated: January 20, 2025

Key Takeaways

Coinbase-backed lawsuit claims FDIC withheld key crypto-related documents from FOIA disclosure;
Whistleblower reports suggest FDIC may have blocked access to over 150 unreleased letters;
FDIC defends its actions but agrees to review additional requests on a fast-tracked basis.

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Coinbase Backs Lawsuit Over FDIC's Missing Crypto Documents

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The Federal Deposit Insurance Corporation (FDIC) faces accusations of leaving out key documents in an ongoing Freedom of Information Act (FOIA) lawsuit supported by Coinbase $1.58B .

The suit focuses on "pause letters" sent to banks, advising them to suspend crypto-related activities while regulatory reviews were underway.

In a January 17 court filing, History Associates, the firm pursuing the case, alleged that the FDIC may have excluded additional letters from its disclosures.

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According to the firm, whistleblower reports suggest the agency has a pattern of obstructing FOIA requests. It claims at least 150 documents linked to its request were not provided, beyond the 25 that were eventually shared.

The released letters encouraged banks to pause cryptocurrency operations as part of what the crypto industry calls “Operation Chokepoint 2.0”.

Paul Grewal, Coinbase’s Chief Legal Officer, stated in a January 16 post on X that the lawsuit seeks all pause letters identified by the FDIC’s Office of Inspector General.

That said, he argued that the FDIC limited its search to letters explicitly mentioned in a report from the Inspector General. Grewal believes additional letters exist and criticized the FDIC for delaying efforts to clarify this issue, saying it might take up to a year to resolve.

In response, the FDIC stated in its January 17 filing that it has complied with the FOIA request by releasing relevant documents and conducting an adequate search. It argued there is no reason to believe letters outside the timeframe of March 2022 to May 2023 fall under the original request.

However, the FDIC said it is treating requests for documents outside the original timeframe as a separate FOIA request and would review it on an expedited basis.

On January 16, Senator Cynthia Lummis sent a letter to FDIC, raising concerns about the agency's handling of cryptocurrency oversight. What did the letter say? Read the full story.