- A judge ordered the FDIC to release Operation Chokepoint 2.0 letters, boosting transparency in crypto banking regulations.
- Coinbase’s FOIA requests seek clarity on the FDIC’s deposit caps, raising concerns about the lack of public input in regulatory decisions.
- Ongoing legal battles highlight the push for transparency as crypto advocates fear renewed pressure from federal banking regulators.
Federal Deposit Insurance Corporation releases pause letters about Operation Chokepoint 2.0 to the public as per the judge’s order after a hearing on September 18, 2024. In a tweet, Coinbase’s chief legal officer, Paul Grewal, expressed gratitude for the court’s decision.
The FDIC must review the 23 letters and redact the pertinent language. They must provide Coinbase with these redacted documents by November 22, 2024. An additional requirement is that both parties submit a Joint Status Report by December 6, 2024. To encourage transparency, Judge Ana C. Reyes signed this order on November 4, 2024.
FOIA Requests to Shed Light on Regulatory Actions
Coinbase requested information from US officials regarding the ongoing crackdown on banking for cryptocurrency businesses through two Freedom of Information Act requests. Grewal highlighted that these requests target the FDIC, which allegedly instructed banks to limit deposits from crypto firms to 15%. He emphasized the importance of these requests in clarifying regulatory approaches to digital assets.
Furthermore, the first FOIA request seeks documents linking the FDIC’s deposit caps on digital assets. The second request aims to understand regulatory responses to similar inquiries in the past. Grewal noted that the FDIC imposed these caps without a public comment period, which typically accompanies such decisions. Concerns regarding regulatory accountability and transparency are raised by this absence of public input.
Ongoing Legal Challenges and Regulatory Pressure
It has been difficult for Coinbase to get regulators to be fully transparent. The SEC and FDIC have been sued by the corporation for its failure to reply to earlier FOIA requests. This includes a 2023 request related to Ether classification.
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Although Coinbase has yet to secure all letters, Grewal remains optimistic about the process. He reaffirmed the company’s pledge to complete transparency and said they would do everything in their power to meet this objective. Federal measures to limit cryptocurrency companies’ access to banking services are known as Operation Chokepoint 2.0.
Critics argue this mirrors the original Operation Chokepoint from 2013. This earlier initiative faced backlash for pressuring banks to exclude lawful industries deemed “high-risk.” Crypto advocates now fear that similar tactics are being used against compliant cryptocurrency firms. Hence, the ongoing legal actions and FOIA requests underscore the critical need for transparency in regulatory practices.
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