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Key Takeaways:
- Coinbase accuses the FDIC of unlawfully withholding crypto oversight documents under FOIA, specifically related to “pause letters” sent to banks.
- The lawsuit aims to expose a broader effort by federal agencies to restrict crypto firms’ access to banking services.
- Coinbase seeks a court ruling to stop the FDIC’s alleged misuse of FOIA exemptions and prevent future denials of similar requests.
Coinbase has intensified its legal battle with the Federal Deposit Insurance Corporation (FDIC), filing a detailed opposition brief in its ongoing Freedom of Information Act (FOIA) lawsuit. The crypto exchange accuses the federal agency of unlawfully withholding documents related to its supervision of crypto-related banking activity.
Dispute Over “Pause Letters” and Oversight Records
At the heart of the case are “pause letters” allegedly sent by the FDIC to banks, urging them to halt crypto-related services. Coinbase claims these communications reflect a deliberate effort to limit banking access for crypto firms. The FDIC cited FOIA Exemption 8, which protects financial regulatory information, to justify withholding the records.
However, Coinbase argues that the exemption has been misapplied. The company says the FDIC imposed blanket redactions and offered only vague justifications for keeping the materials secret, violating FOIA’s transparency mandates.
Court Previously Rejected FDIC’s Full Withholding
The United States District Court for the District of Columbia had earlier ordered the FDIC to produce redacted versions of the documents, signaling skepticism over the agency’s broad refusal. Coinbase’s brief further highlights internal FDIC guidance instructing staff to withhold materials without proper review, reinforcing its claims of a systemic lack of transparency.
The brief also notes the FDIC failed to follow FOIA’s requirement to release non-exempt sections of documents and did not properly preserve or interpret requests as required by law.
Coinbase Seeks Broader Legal Remedy
Coinbase’s filing doesn’t only ask for document release. It requests the court formally declare the FDIC’s FOIA practices unlawful, aiming to prevent the agency from rejecting future requests using similar tactics. The court has already permitted limited discovery, allowing Coinbase access to policy and training materials it says support its allegations.
Also Read: LTO Token Surges 250% After Migrating to Coinbase’s Base Layer-2 Network
In response, the FDIC moved to dismiss the case, arguing no legal violation occurred. Coinbase rejects this, asserting the facts and agency records demonstrate clear misuse of FOIA.
The case could have major implications for regulatory transparency in crypto. As Coinbase challenges what it calls deliberate suppression of crypto oversight records, the outcome may set a precedent for how federal agencies must handle crypto-related FOIA requests moving forward.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
