Coinbase Will 'Not Relent' in Push to Uncover Motives Behind US Crypto Crackdown

Coinbase’s longstanding campaign to force the U.S. government to clarify how it approaches crypto ratcheted up on Monday, with the American crypto exchange filing multiple legal requests for internal documents at the Federal Deposit Insurance Commission (FDIC).

The first request pertains to documents detailing any cap or limit on the amount of digital assets allowed to be held, which the FDIC has allegedly imposed on American depository institutions. It was submitted via the Freedom of Information Act (FOIA), which requires U.S. executive agencies like the FDIC to disclose internal information if requested by the public. 

Coinbase’s second request to the FDIC asked for information regarding the types of FOIA requests submitted to the bank regulator since the beginning of 2022. Presumably, this is to attempt to hold the FDIC to account if the agency has rejected numerous crypto-related information requests. Recipients of FOIA requests can legally deny them for select reasons including the sensitive nature of a given subject, or in the name of respecting personal privacy.

Fed President Says Crypto 'Almost Never' Used Outside of Drug Deals, Illegal Activities

Minneapolis Federal Reserve President Neel Kashkari on Monday dismissed crypto as the currency of drug deals and other criminal enterprises.  Kashkari told audience members at a town hall in Wisconsin that “very few transactions are actually happening” in crypto, a video of the event hosted by the Chippewa Falls Area Chamber of Commerce shows. The comments underscore the bank regulator's resistance to crypto, even as institutional adoption of the asset class heats up.  “They're not paying for go...

Paul Grewal, Coinbase’s chief legal officer, announced the requests on Monday, framing them as the latest move in the company’s ongoing battle to unmask the U.S. government’s largely undisclosed crypto policies. 

“We filed two new sets of FOIA requests in our continued effort to get any sort of clarity on how regulatory agencies are approaching digital assets,” Grewal posted to Twitter (aka X). “In short, so long as the government will not relent, neither will Coinbase.”

Last week, Coinbase filed a motion in a Washington, D.C. federal court accusing the U.S. Securities and Exchange Commission (SEC) of improperly withholding crypto-related documents requested via FOIA. On multiple occasions, the SEC has denied FOIA requests filed by Coinbase, claiming that revelation of the documents in question would interfere with the agency’s law enforcement activities.

Meanwhile, America’s top crypto exchange is currently engaged in a proactive lawsuit against the SEC over the latter’s continued refusal to issue crypto-specific rulemaking. Coinbase is attempting to force the agency, via court order, to clarify its approach to digital assets. The case is currently before a federal appeals court in Philadelphia.

Coinbase Accuses SEC of 'Erroneous Denials' in Delayed FOIA Request

Coinbase has filed a motion in the U.S. District Court of Columbia, accusing the U.S. Securities and Exchange Commission (SEC) of withholding key documents and using unjustified delays to obstruct access to information vital for its defense. In the Oct. 15 filing, the exchange claims the SEC improperly relied on FOIA Exemption 7(A) and is now proposing an unreasonable three-year review to reassess the withheld documents. The U.S. Freedom of Information Act (FOIA), enacted in 1966, allows public...

Crypto leaders including Custodia Bank CEO Caitlin Long celebrated the announcement of new crypto-related FOIA requests, tying them to what many in the industry consider to be the intentionally opaque digital assets policies of the current White House, as exemplified by the crypto-skeptic positions of President Joe Biden and his close ally in the Senate, Elizabeth Warren (D-MA).

“The lawlessness of Biden/Warren’s federal banking agencies toward the U.S. banks that served law-abiding crypto companies will continue to be exposed,” Long posted to Twitter on Monday. “Justice for this is coming folks.”

Edited by Andrew Hayward