FDIC’s Hidden Push to Limit Crypto Services Revealed by Coinbase

YEREVAN (CoinChapter.com) — Coinbase has identified over 20 instances of the FDIC advising U.S. banks to limit or avoid offering crypto services, as reported by Paul Grewal, Coinbase’s chief legal officer. This disclosure came after Coinbase’s two Freedom of Information Act (FOIA) requests aimed at exposing the U.S. regulator’s actions to prevent banks from serving the crypto sector.

Grewal stated that the FOIA requests unearthed communications in which the FDIC told multiple banks to pause or avoid crypto services. He also added,

“The public deserves transparency, not an agency that’s working behind a bureaucratic curtain.”

The information disclosed outlines the FDIC’s repeated recommendations to banks to slow down or hold off on expanding their crypto-related offerings, impacting access to banking services for crypto companies.

Coinbase Finds “20 Examples” of FDIC Crypto Warnings to Banks

In the November 1 court filing, Coinbase detailed its findings, sharing 23 documents where the FDIC questioned or discouraged banks from offering crypto services. These communications reveal the FDIC’s hesitancy to allow banks to support the crypto industry freely, even when banks have conducted their risk assessments.

Additionally, one example, called “Document 5,” details the FDIC’s actions with a specific bank. The FDIC requested a meeting to examine the bank’s crypto operations closely. After this meeting, the bank submitted additional documentation. However, the FDIC raised more questions. It advised the bank not to expand its crypto services. Despite the bank’s efforts to follow regulations, the FDIC maintained its position. It restricted further crypto involvement until a full review could be completed.

Crypto Restrictions Uncovered

Coinbase claims that recently uncovered communications reveal the FDIC has taken steps to limit crypto access in the banking industry.

Paul Grewal, Coinbase’s chief legal officer, emphasized the importance of transparency. He argued that U.S. banking policies should not be influenced by private government discussions. Grewal stressed that the public has a right to know about these decisions. He noted that these policies affect the financial options available to law-abiding American companies.

Despite regulatory obstacles, Coinbase has committed to working within any future U.S. administration. Notably, with the U.S. presidential election on November 5 approaching, Coinbase confirmed its readiness to collaborate with either Vice President Kamala Harris or Donald Trump, depending on who wins.