Coinbase Demands Transparency From Regulators Amid Crypto Crackdown

Coinbase has filed two Freedom of Information Act (FOIA) requests, demanding transparency from U.S. regulators

Cryptocurrency exchange Coinbase has filed two Freedom of Information Act (FOIA) requests, demanding transparency from U.S. regulators regarding their crackdown on the cryptocurrency industry, particularly concerning deposit limitations imposed on banks. The exchange seeks clarity on the Federal Deposit Insurance Corporation’s (FDIC) stance on digital assets and its handling of past information requests, signaling a growing tension between the burgeoning crypto industry and regulatory bodies.

Reports indicate that the FDIC has instructed banks to cap deposits from crypto companies at 15% of their total deposits, a move Coinbase alleges was implemented without the legally required public input. This action has sparked concerns about potential overreach by regulators and its impact on the growth of the cryptocurrency sector. Coinbase’s FOIA requests aim to shed light on the rationale behind these deposit caps and the decision-making process that led to their implementation.

Furthermore, the exchange is seeking information on how the FDIC and other regulators have responded to previous crypto-related information requests. This effort suggests a pattern of perceived opacity within regulatory agencies, prompting Coinbase to take a more assertive stance in demanding transparency and accountability.

Coinbase’s chief legal officer, Paul Grewal, emphasized the exchange’s commitment to seeking regulatory clarity, stating, “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. In short, so long as the government will not relent, neither will @coinbase.” This statement underscores Coinbase’s determination to challenge what it perceives as a hostile regulatory environment.

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He clarified that these requests are separate from earlier FOIA filings that are now part of ongoing federal lawsuits, indicating a willingness to pursue legal avenues to obtain the desired information.

Coinbase’s proactive approach reflects a broader trend within the cryptocurrency industry, as companies seek to navigate a complex and evolving regulatory landscape. The upcoming presidential election has further amplified the debate surrounding cryptocurrency regulation, with candidates presenting diverse viewpoints on the industry’s future.

In the past, Coinbase has taken legal action against both the SEC and the FDIC for allegedly failing to comply with similar information requests. Notably, in 2023, Coinbase sought documents from the SEC regarding its classification of Ether but was subsequently charged by the agency over its ETH staking service, highlighting the challenges faced by cryptocurrency companies in seeking regulatory clarity.