Coinbase, the cryptocurrency exchange, has identified “over 20 instances” where U.S. regulators have urged American banks to avoid engaging in crypto-related banking services, as stated by its chief legal officer.
This revelation comes after Coinbase submitted two Freedom of Information Act (FOIA) requests to the Federal Deposit Insurance Corporation (FDIC)—the agency responsible for insuring bank deposits—seeking information on the current crackdown on cryptocurrency by U.S. banks.
Coinbase’s CLO Calls for Transparency
In a post on November 1, Coinbase’s chief legal officer, Paul Grewal, emphasized that “the public deserves transparency, not an agency operating behind a bureaucratic veil.” He detailed that the findings include more than 20 instances where the FDIC advised banks to “pause,” “refrain from providing,” or “not proceed” with crypto banking services.
Grewal criticized the contents of letters disclosed in the FDIC’s November 1 court filing, labeling them a “shameful example” of a government body attempting to restrict financial access to compliant American businesses.
FDIC Questions Banks’ Risk Assessments
The court documents summarize 23 instances where the FDIC expressed concerns regarding banks’ evaluations of risks associated with crypto services, recommending that they delay offering such services until a thorough review is conducted. Many of these cases followed a similar pattern; for example, in “Document 5,” the FDIC reportedly convened a meeting with a bank to assess its crypto offerings.
Although the bank provided additional documentation post-meeting, the FDIC raised further “questions” and instructed the bank that “until such review is completed, the bank should not expand the service to additional customers.”
In related news, on October 30, Cointelegraph reported that Coinbase is “prepared to collaborate with either administration” in the U.S., regardless of whether Democratic candidate and Vice President Kamala Harris or Republican Donald Trump emerges victorious in the forthcoming presidential election on November 5.