Cryptocurrency exchange Coinbase has discovered “over 20 examples” of the United States regulator advising US banks to steer clear of crypto-related banking services, according to its chief legal officer.
The discovery follows Coinbase filing two Freedom of Information Act (FOIA) requests against the Federal Deposit Insurance Corporation (FDIC) — the US agency insuring bank deposits — demanding they disclose information about the ongoing crypto crackdown among US banks.
Public ‘deserves transparency,’ says Coinbase CLO
“So far, we’ve uncovered more than 20 examples of the FDIC telling banks to “pause” or “refrain from providing” or “not proceed” with offering crypto-banking services,” Coinbase chief legal officer Paul Grewal claimed in a Nov. 1 X post.
Source: Paul Grewal
Grewal declared that the public “deserves transparency, not an agency that’s working behind a bureaucratic curtain.”
Commenting on the descriptions of letters submitted by FDIC in the Nov. 1 court filing, Grewal wrote that “the contents are a shameful example of a government agency trying to cut off financial access to law-abiding American companies.”
FDIC cast doubt over banks’ risk assessment
The court filing summarizes 23 documents detailing instances where the FDIC questioned banks' risk assessments regarding crypto services, advising them to hold off on offering such services until a review is completed.
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Most of the cases provided were similar. In one case, outlined in “Document 5,” the FDIC reportedly called a meeting with a bank to scrutinize its crypto services.
Document 5 explaining the FDIC advising a bank not to engage in crypto services until review is complete. Source: CTF assets
Despite the bank providing further documentation after the meeting, the FDIC allegedly raised additional “questions” and advised the bank, “Until such review is completed, the bank should not expand the service to additional customers.”
Meanwhile, on Oct. 30, Cointelegraph reported that Coinbase is “prepared to work with either administration” in the US, whether Democratic candidate and Vice President Kamala Harris or Republican Donald Trump wins the presidency, ahead of the election on Nov. 5.
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