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Coinbase, a US-based cryptocurrency exchange, has reported that the Federal Deposit Insurance Corporation (FDIC) failed to respond to requests under the Freedom of Information Act (FOIA). The company sought access to the full content of communications referred to as “pause letters,” which were sent by the FDIC to banks urging them to freeze transactions related to crypto services.
Pressuring Banks on Cryptocurrency
Coinbase’s legal team has argued that the FDIC did not thoroughly scan the appropriate databases and inadequately stored the documents in question. The company claims that the agency has been deficient in responding to information requests aimed at clarifying the situation.
Coinbase continues its struggle to prove the pressure on banks regarding cryptocurrency in court.
Legal Proceedings and Rulings
As part of the legal process, Coinbase has involved the law firm History Associates and filed a motion to intervene in the lawsuit against the FDIC initiated in January. This firm contends that the FDIC has not upheld its commitment to share information within the designated timeframe.
In February, the court suspended the FDIC’s response time and established an informal information exchange process to occur biweekly between the parties. This situation has strengthened the allegations that the FDIC has not taken adequate steps regarding FOIA requests.
Coinbase’s legal representatives reiterated that the relevant documents have not been comprehensively examined and that necessary precautions have not been taken. The FDIC’s stance on the formal submission of documents remains unclear.
Paul Grewal, Coinbase’s Chief Legal Officer, stated that this process is part of certain regulatory agencies within the Biden administration pushing to impose restrictions on the crypto sector.
Paul Grewal: “We argue that the pause letters are part of an attempt to narrow the crypto industry under Operation Choke Point 2.0.”
Last month, the FDIC shared redacted versions of the pause letters and related correspondence concerning the oversight of crypto activities. To obtain the complete versions of these documents, House Oversight Committee Chairman James Comer made an official request to FDIC Acting Chairman Travis Hill.
As the legal process continues, developments regarding the court proceedings and the documents to be obtained are being closely monitored. The outcome of this case is expected to spark new discussions that could impact the sector significantly.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
