Coinbase Challenges FDIC Over Redacted Documents and Regulatory Actions
This is a segment from the Forward Guidance newsletter.
Coinbase Legal Actions and FDIC Correspondence
The SEC sued Coinbase last year for alleged securities violations. Earlier this year, Coinbase initiated lawsuits against the SEC and FDIC after its Freedom of Information Act (FOIA) requests were denied.
Recently, Coinbase shared letters from the FDIC indicating that “Operation Chokepoint 2.0 wasn’t just some crypto conspiracy theory,” according to chief legal officer Paul Grewal. A March 2022 letter from FDIC assistant regional director Eric Guyot regarding a proposed fintech product states that the FDIC had not determined necessary regulatory filings for banks engaging in crypto activities and requested a pause on all crypto asset-related activity.
Government redactions were prevalent in these letters. Grewal criticized the FDIC for excessive redactions that obscure vital information. History Associates, a consultancy firm hired by Coinbase, expressed dissatisfaction with the FDIC's disclosures. Specific redactions hinder the firm's ability to assess whether all non-exempt portions of the letters have been revealed.
The FDIC claims the redactions protect bank identities, but declined further comment. Recent discussions about Operation Chokepoint 2.0 were reignited when a16z co-founder Marc Andreessen mentioned that approximately 30 tech and crypto founders have faced banking issues in recent years.
Grewal emphasized that law-abiding American businesses should access banking services without government interference, suggesting potential changes with future administrations.