Coinbase’s fray with the FDIC continues

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Remember when the SEC sued Coinbase last year for alleged securities violations? And then earlier this year, the crypto exchange launched suits against the SEC and FDIC after its Freedom of Information Act (FOIA) requests were denied? 

Related, Coinbase on Friday shared letters from the FDIC. The documents, according to chief legal officer Paul Grewal, show that “ Operation Chokepoint 2.0 wasn’t just some crypto conspiracy theory.” 

A March 2022 letter about a proposed “fintech product” (written by FDIC assistant regional director Eric Guyot) notes, for example, the FDIC “has not yet determined what, if any, regulatory filings will be necessary for a bank to engage in this type of activity.” Guyot then adds: “As a result, we respectfully ask that you pause all crypto asset-related activity .”

The black highlighter tool (i.e., government redactions) was used plenty on that letter and others. The FDIC is “still hiding behind way overbroad redactions,” Grewal explained.

History Associates, a consultancy firm Coinbase hired in 2023 to help retrieve records , said in a Friday court filing that it’s not satisfied with what the FDIC produced.

First, the letters appear to redact information about the type of digital asset products or services at issue, History Associates notes. And secondly, heavy redactions in four specific letters “makes it difficult for History Associates to evaluate whether the FDIC has disclosed all non-exempt portions of those letters.”

The FDIC claims, according to the court filing, that the redactions help protect the identity of the banks. An FDIC spokesperson declined to comment further.

Operation Chokepoint 2.0 claims resurfaced recently when a16z co-founder Marc Andreessen said on Joe Rogan’s podcast that roughly 30 tech and crypto founders have been debanked in recent years.

“Law-abiding American businesses should be able to access banking services without government interference,” Grewal added on X, noting the incoming administration can reverse course.

I’m sure there’ll be plenty more on this front.

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