Coinbase’s digging into government records is uncovering a pattern of the FDIC asking banks to halt crypto services. This isn’t just speculation, according to Coinbase’s chief legal officer, Paul Grewal.
More Than Just a Conspiracy?
Grewal, posting on X (formerly Twitter), says newly released documents confirm what many in the crypto industry suspected: a coordinated effort to stifle the industry. He criticizes the FDIC for heavily redacting information and not releasing all the relevant documents. He claims these actions prove that the accusations of a government crackdown weren’t just a conspiracy theory.
A “Pause” That Never Ends?
One example from the documents shows an FDIC regional director asking a Texas bank to pause its crypto operations in 2022. The reason given? The FDIC hadn’t figured out the necessary regulations for banks involved in crypto. Caitlin Long, CEO of Custodia Bank, calls these “pause letters” a thinly veiled attempt to shut down legitimate crypto businesses. She argues that the indefinite nature of these pauses is effectively a “cease and desist” order disguised in legal jargon.
A Pattern of Suppression?
This isn’t the first time Coinbase has uncovered this type of action. Last month, they found 20 similar instances where the FDIC told banks to stop crypto activities without any evidence of wrongdoing. Earlier this year, Coinbase even sued the FDIC and the SEC, alleging they were trying to undermine the crypto industry. The newly released information appears to support Coinbase’s claims.
