Coinbase, the US’s biggest crypto exchange by trading volume, registered a major win in its fight for disclosing Chokepoint 2.0 documents. These letters are linked to the ongoing crackdown on crypto companies among banks from the regulators.
The exchange has filed two Freedom of Information Act (FOIA) requests targeting US regulators. Reports suggest that the FDIC has asked banks to limit deposits from crypto companies to just 15% of total deposits. The first request seeks documents about the digital asset deposit cap imposed by the FDIC and other banking regulators, while the second request looks for the watchdogs’ response.
FDIC must disclose Chokepoint 2.0 docs
Paul Grewal, Chief Legal Officer of Coinbase, in a post announced that the judge in the FDIC case ordered the agency to present the Operation Chokepoint 2.0 pause letters. He appreciated the court’s consideration when it was needed more than ever.
The court ordered a review of the 23 pause letters to determine which portions should be redacted and to produce the redacted letters. The letters must be handed to the plaintiff by November 22, 2024. However, the notice also asked the parties to submit a Joint Status Report on or before December 6, 2024.
Earlier, Grewal had mentioned that slowly the picture became clear as FDIC started giving them information related to our FOIA request about the pause letters it sent to financial institutions linked to Operation Chokepoint 2.0. This suggests that the content was a shameful example of a government agency that tried to cut off financial access to American companies.
He had highlighted that they uncovered more than 20 examples of the FDIC telling banks to “pause” or “refrain from providing” or “not proceed” with offering crypto-banking services. Coinbase CLO had demanded public transparency in this matter.
Coinbase battles SEC
Coinbase is already facing a clash with the US Securities and Exchange Commission (SEC) in a federal appeals court. The exchange argues current securities laws don’t fit the unique nature of digital assets. It filed a petition with the SEC back in 2022 where it urged a clear framework for digital assets that qualify as a security.
The SEC denied Coinbase’s request in 2023, arguing existing regulations are sufficient. Coinbase wants the court to overturn the watchdog’s denial. It claims that the regulatory opacity hampers its ability to operate compliantly in the region.
Amid these legal disputes, Coinbase (COIN) share price has taken a minor hit. COIN share price has dropped by around 18% in the last 6 months while it has gained more than 115% in the past year. COIN traded at $186.27, in the last session.
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