- Coinbase’s legal chief alleges the FDIC is pressuring banks to halt crypto services.
- FDIC’s “pause letters” are claimed to be part of a larger effort aimed at limiting crypto growth.
Coinbase’s Chief Legal Officer Paul Grewal has accused the Federal Deposit Insurance Corporation of taking covert actions to stifle the crypto industry.
Grewal claims that documents obtained through a Freedom of Information Act reveal a series of “pause letters.”
In these letters, the FDIC allegedly instructed banks to delay or halt services for crypto firms.
Describing the letters as a “shameful example of a government agency trying to cut off financial access to law-abiding American companies,” he argued that the FDIC is unfairly targeting lawful crypto firms and limiting their access to banking services.
The documents, shared by Coinbase, show that FDIC officials urged banks to refrain from launching or expanding crypto-related services due to concerns over “safety and soundness” and potential consumer risks.
In each instance, the FDIC requested that banks wait until it completed further reviews—a process Coinbase argues creates unfair obstacles for crypto firms.
Operation Chokepoint
Grewal suggests that the FDIC’s actions resemble those seen in “Operation Chokepoint 2.0,” a term used by industry experts to describe the regulatory crackdown facing the crypto sector.
The name alludes to a previous government initiative targeting industries seen as high-risk, such as firearms dealers and payday lenders, by cutting off their access to banking services.
Crypto proponents argue that regulators are taking a similar approach by limiting access to traditional banking systems for digital asset companies, aiming to curb the industry’s growth without directly banning it.
This strategy places crypto firms at a disadvantage and is forcing some to seek alternative financial arrangements overseas.
As federal agencies like the FDIC and SEC escalate regulatory pressure, some fear a “crypto cold war” growing in the US.
Crypto market movers
- Bitcoin is down 2% over the past 24 hours to $68,325.
- Ethereum is down 2.2% to trade at $2,448.
What we’re reading
- How the US is tightening restrictions on foreign crypto mining and data operations — DL News
- Should You Skip Trading the Election? Arthur Hayes Explains What Could Drive Bitcoin Prices Up — Unchained
- Harris Odds Rise on Polymarket as ‘Election Fraud’ Allegations Ramp Up Trump Hedge Bets — CoinDesk
- Hana, who reported being drugged by a DWF Labs partner in a bar, urges crypto to combat sexual harassment — DL News
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
