Coinbase accuses FDIC of blocking access to key documents

Coinbase accuses FDIC of blocking key documents, raising concerns about transparency and legal compliance in its crypto investigation.

Coinbase, a popular cryptocurrency exchange, has accused the Federal Deposit Insurance Corporation (FDIC) of blocking access to important documents. These are among the documents from an investigation into the FDIC’s treatment of cryptocurrency businesses. However, Coinbase alleges the FDIC has not provided the information required under the Freedom of Information Act (FOIA), despite a court order.

On January 17, Paul Grewal, Coinbase’s Chief Legal Officer, had a different message for the FDIC. He criticized the way the agency processed the company’s FOIA requests. In X post, Grewal explained the FDIC has not provided Coinbase with important documents. This post concerns the FDIC’s communications with banks that offer cryptocurrency services. The crux of the issue is ‘pause letters’, letters sent by the FDIC to banks urging them to cease their crypto activities.

Coinbase Calls for Legal Action After FDIC Withholds Documents

Previously, Coinbase had asked for all pause letters from its FOIA request in light of a report from the Office of Inspector General. For that reason, Coinbase thinks there may be other pause letters out there that FDIC has not publicly shared. In a letter to Coinbase asking the bank to search for more documents, the FDIC said it could take up to a year to fulfill the request.

As a result, Coinbase has decided to file an update on its FOIA complaint and notify the court regarding the incident. The FDIC is not following the law by withholding the documents, the company argues.

Whistleblowers have also expressed concerns over this. The FDIC is being accused in some reports of wrongdoing, such as mislabeling documents and not searching all the relevant databases. In addition, the FDIC is accused of using taxpayer money to investigate Coinbase itself. These allegations have not been responded to by the FDIC.

Earlier this week, Senator Cynthia Lummis wrote a letter to the FDIC. Additionally, Senator Lummis has called for the protection of crypto records. Coinbase, therefore, insists on transparency and legal compliance. Ultimately, the situation remains under close scrutiny.