Coinbase Opposes FDIC’s Request for 16-Day Extension in Public Records Lawsuit
Coinbase, a leading cryptocurrency exchange, has opposed a 16-day extension request by the Federal Deposit Insurance Corporation (FDIC) to delay its response in a public records lawsuit over documents tied to the alleged debanking of crypto firms.
Background
The case centers on internal communications that Coinbase believes show the agency engaged in a covert campaign, dubbed “Operation Chokepoint 2.0,” to isolate crypto from the U.S. financial system.
Coinbase’s Opposition
Coinbase Chief Legal Officer Paul Grewal pushed back on treating the FDIC’s request as standard procedure, calling the agency’s request “absurd” in a post on Thursday.
Arguments
Coinbase argues the FDIC’s response deadline is April 16, not May 2 as the agency claims in its own motion. The crypto exchange said the agency is attempting to “evade its legal obligations” and called the extension “unwarranted.”
Coinbase also said the FDIC has had months to prepare and had already said it needed only 30 days post-stay to file a motion to dismiss. The motion, Coinbase noted, requires just a four-page pre-motion notice, far shorter than the 13-page extension request itself.
Context
The court battle is part of the growing scrutiny the FDIC is facing over whether it helped coordinate an informal campaign to debank crypto firms without public rulemaking or congressional oversight.
Previous Developments
In February, the agency released nearly 800 pages of internal documents, following pressure from Coinbase and court orders, revealing how banks were discouraged from offering services to companies engaged in digital assets.
Some were told to halt activity until regulators deemed it “safe and sound,” while others received warnings about “reputation risk” tied to crypto, even in the absence of financial system concerns.
Impact
The disclosures fueled long-standing allegations that federal regulators, under the Biden administration, attempted to suppress the crypto industry by leaning on financial institutions behind closed doors.
Investigation
The House Oversight Committee is now investigating whether such tactics amounted to improper debanking of lawful businesses. Lawmakers have reached out to Coinbase, Andreessen Horowitz, and other industry leaders, seeking documentation and testimony.
Conclusion
The opposition by Coinbase highlights the ongoing controversy surrounding the FDIC’s alleged efforts to suppress the crypto industry. As the investigation continues, it remains to be seen whether the agency’s actions will be deemed unlawful or unethical.
FAQs
What is Operation Chokepoint 2.0?
Coinbase believes the FDIC engaged in a covert campaign, dubbed “Operation Chokepoint 2.0,” to isolate crypto from the U.S. financial system.
What is the FDIC’s response deadline?
Coinbase argues the FDIC’s response deadline is April 16, not May 2 as the agency claims in its own motion.
What is the purpose of the lawsuit?
The lawsuit aims to uncover internal communications that Coinbase believes show the FDIC’s alleged efforts to debank crypto firms without public rulemaking or congressional oversight.
What is the House Oversight Committee investigating?
The committee is investigating whether the FDIC’s alleged actions amounted to improper debanking of lawful businesses.
What is the impact of the disclosures?
The disclosures have fueled long-standing allegations that federal regulators, under the Biden administration, attempted to suppress the crypto industry by leaning on financial institutions behind closed doors.
