Coinbase chief legal officer Paul Grewal shared documents revealing 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 Dec. 6, 2024. They were dubbed “pause letters” because they repeatedly recommend suspending or refraining from using crypto services.
Grewal stated:
“They show a coordinated effort to stop a wide variety of crypto activity — everything from basic BTC transactions to more complex offerings.”
These letters result from Coinbase’s Freedom of Information Act (FOIA) request filed on Oct. 18, seeking clarity on an alleged 15% deposit cap imposed on crypto-friendly banks.
Although the FDIC complied with the request in December 2024, the documents were heavily redacted. As a result, Coinbase made a new request to access versions with more accessible parts.
Grewal added that the FDIC found two more letters in this new request, claiming that new information is unveiled when they are pressured for clarity and urging Congress to launch hearings “without delay.”
He previously stated that the letters proved the materiality of Operation Chokepoint 2.0, an alleged effort by the President Joe Biden administration to hinder the growth of the US crypto industry by limiting access to banking services.
FDIC replies
As a response, the FDIC published an internal 2022 memorandum from its Division of Risk Management Supervision detailing how its supervisors should approach banks planning to offer crypto services.
Despite Grewal’s letters revealing that the FDIC urged banks to avoid foraying into crypto, the FDIC recommendations do not explicitly tell its supervisors this.
Moreover, the FDIC’s document also contains a draft that supervisors can use to reply to banks notifying them of their engagement with crypto. The draft is similar to some of the letters Grewal shared.
As Reuters reported in December 2024, FDIC Chairman Martin Gruenberg stated that the agency is not hindering crypto firms’ access to banking services. However, banks engaging with crypto are “subject to supervisory attention.”
Crypto industry players in the US prioritize access to banking services and hope President-elect Donald Trump will address the matter on his first day in office.
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