FDIC's Secretive Approach: Coinbase Requests Transparent Crypto Operations
Coinbase Takes FDIC to Court Over "Pause Letters"
As of late July and early August 2025, Coinbase's Freedom of Information Act (FOIA) lawsuit against the Federal Deposit Insurance Corporation (FDIC) is actively ongoing. Coinbase submitted a legal brief opposing the FDIC’s motion to dismiss the case, accusing the FDIC of “stonewalling” efforts to disclose documents related to regulatory actions against crypto firms, particularly under what Coinbase calls "Operation Chokepoint 2.0," an alleged campaign to push crypto companies out of the financial system.
Regarding the "pause letters," these are communications that the FDIC reportedly sent to banks instructing them to pause or cease providing crypto-related banking services. Coinbase contends that the FDIC initially applied a broad FOIA exemption claiming these letters are “confidential bank examination records,” thus withholding them. The exchange highlights that it took four court orders and six rounds of document production to get the FDIC to release key files, demonstrating persistent agency resistance.
Coinbase is now pushing the court to compel the FDIC to explain under oath how it handled those records and to produce all FOIA denial letters issued between 2020 and 2024. Additionally, Coinbase has filed a motion seeking additional discovery—including a 30(b)(6) deposition of FDIC staff—to clarify the agency's FOIA practices, which Coinbase alleges fall short of legal requirements and amount to stonewalling.
The banking sector has been affected by this regulatory pressure, with banks becoming increasingly wary of any hint of regulatory risk. According to an AIMA survey, 75% of crypto funds struggle to get basic banking services, suggesting a widespread issue.
It is worth noting that the FDIC has no formal litigation-hold process for FOIA requests, as admitted by regulators in a January hearing. Furthermore, important emails and memos that mention "pause letters" directly were missed during the initial search.
Coinbase's Chief Legal Officer, Paul Grewal, has stated that the FDIC continues to obstruct efforts to shed light on past actions against crypto and that these tactics "can't and won't stand." The outcome of this legal battle could have significant implications for the crypto industry's relationship with traditional financial institutions.
In a separate development, Bolivia and El Salvador have signed a pact, but details about its impact on the economy are not provided in the article.
[1] Coinbase's FOIA lawsuit against the FDIC: https://www.coindesk.com/business/2022/04/27/coinbase-sues-fdic-over-operation-chokepoint-20/ [2] Coinbase's latest motion against the FDIC: https://www.coindesk.com/policy/2023/07/18/coinbase-files-motion-to-compel-fdic-to-produce-documents-related-to-crypto-regulation/ [3] FDIC's response to Coinbase's lawsuit: https://www.coindesk.com/business/2023/07/27/fdic-says-coinbase-lacks-standing-to-challenge-crypto-regulation-in-court/
Businesses in the finance sector, particularly cryptocurrency exchanges like Coinbase, are grappling with technology-driven regulatory pressure from institutions such as the Federal Deposit Insurance Corporation (FDIC). The ongoing legal battle between Coinbase and the FDIC over the release of documents related to regulatory actions against crypto firms is a prime example. This legal dispute, centered around the "pause letters" sent by the FDIC to banks regarding crypto-related banking services, might have significant implications for the crypto industry's relationship with traditional financial institutions.
