Coinbase Chief Legal Officer Paul Grewal shared documents showing that the Federal Deposit Insurance Corporation (FDIC) urged banks to halt or avoid not only crypto-related services but also simple Bitcoin (BTC) offerings.
The letters are unredacted versions of documents shared by Grewal on December 6, 2024. They were called “pause letters” because they repeatedly recommended suspending or abandoning the use of crypto services.
Grewal stated:
“They demonstrate a coordinated effort to stop a wide range of crypto activity – everything from simple BTC transactions to more complex offerings.”
These letters are the result of Coinbase’s October 18 Freedom of Information Act (FOIA) request seeking clarity on an alleged 15% deposit limit imposed on crypto-friendly banks.
Although the FDIC complied with the request in December 2024, the documents were heavily redacted. As a result, Coinbase has submitted a new request to gain access to versions with more accessible components.
Grewal added that the FDIC has found two more letters in this new request, claiming that new information is revealed when pressure is pressed for clarity and urging Congress to hold hearings “without delay.”
He previously stated that the letters proved the materiality of Operation Chokepoint 2.0, an alleged attempt by President Joe Biden’s administration to hinder the growth of the US crypto industry by restricting access to banking services.
FDIC responds
In response, the FDIC published a 2022 internal memorandum from the Division of Risk Management Supervision detailing how regulators should approach banks planning to offer crypto services.
Despite Grewal’s letters revealing the FDIC urged banks not to dive into cryptocurrencies, the FDIC recommendations don’t explicitly tell regulators this.
Additionally, the FDIC’s document also includes a draft that regulators can use to respond to banks notifying them of their involvement in crypto. The concept is similar to some of the letters Grewal shared.
Like Reuters reported in December 2024, FDIC Chairman Martin Gruenberg stated that the agency does not hinder crypto companies’ access to banking services. However, banks involved in crypto are “subject to regulatory attention.”
Crypto industry players in the US are prioritizing access to banking services and hoping that newly-elected President Donald Trump will handle the case on his first day at work.