What You Need to Know:
- A court dispute involving the crypto industry and the Federal Deposit Insurance Corporation has led to the disclosure of confidential banking documents related to cryptocurrency.
- Coinbase claims that the letters from the FDIC demonstrate that the regulator has been explicitly instructing banks to avoid handling crypto transactions.
Overview of the Situation
Recent discoveries indicate that between 2022 and 2023, the FDIC impeded various crypto banking activities across multiple U.S. banks due to guidance revealed through a court case won by Coinbase Inc. (COIN).
Coinbase secured access to internal FDIC communications after a legal battle against the SEC.
Key Quotes
"We respectfully ask that you pause all crypto asset-related activity," stated the regulatory body in one of the letters. "The FDIC will notify all FDIC-supervised banks at a later date when a determination has been made on the supervisory expectations for engaging in crypto asset-related activity."
Comments from Coinbase
Grewal articulated that the letters are concrete proof that the crypto industry is facing systemic barriers imposed by regulatory authorities. He emphasized that this is not merely conjecture: "There was a concerted plan on the part of the FDIC... to deny banking services to a legal American industry." Furthermore, he expressed concern about the ongoing regulatory uncertainties hindering crypto firms.
The letter exchanges are a part of a larger discussion in Washington D.C. regarding the restriction and oversight of cryptocurrency services, which is being referred to as Operation Chokepoint 2.0, reflecting past government efforts to restrict certain businesses from accessing bank services.
