Judge Orders FDIC to Revise Redactions on Coinbase Documents
District Court Judge Ana C. Reyes in Washington, DC criticized the Federal Deposit Insurance Corporation (FDIC) for excessive redactions in documents related to Coinbase from 2022. These letters discouraged banks from engaging in crypto activities, raising concerns about regulatory overreach within the crypto community.
Judge Reyes accused the FDIC of a “lack of good faith” in handling the documents and ordered the agency to review and revise the redactions by January 3. This ruling followed Coinbase's efforts to obtain these documents and its subsequent lawsuit against the FDIC for greater transparency.
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted the court’s decision on social media, questioning the FDIC's motives. Crypto advocates view these developments as part of a broader debate around “Operation Choke Point 2.0,” which describes perceived anti-crypto actions within the regulatory framework. The letters advising banks against crypto businesses are seen as central to this initiative.
This case occurs amid shifting federal attitudes toward cryptocurrency regulation. FDIC Chair Martin Gruenberg will step down by Inauguration Day, with discussions on potential successors underway. Names mentioned include former Binance.US CEO Brian Brooks. Many in the crypto sector see this leadership change as an opportunity for a more crypto-friendly FDIC.
Additionally, Trump’s “crypto czar,” David Sacks, has committed to preventing another Operation Choke Point, indicating a potential softening of the federal stance on cryptocurrency and encouraging advocates to push for fairer policies.
The legal battle between Coinbase and the FDIC highlights the tension between regulators and the growing crypto industry. Recent developments suggest hope for greater transparency and a more balanced regulatory environment. While the outcome of this case is uncertain, evolving federal policy attitudes may indicate a shift in how cryptocurrencies are treated within the U.S. financial system.