Coinbase: FDIC urges banks to stop providing basic BTC services

The exchange obtained the documents as part of the Freedom of Information Act proceeding

06.01.2025 - 11:05

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What’s new? Paul Grewal, the chief legal officer of the leading US centralized crypto exchange (CEX) Coinbase, has released documents showing that the Federal Deposit Insurance Corporation (FDIC) urged banks to suspend or avoid any crypto services, including simple bitcoin-related products.

Source: X.com

What else is known? Coinbase obtained these documents as part of a lawsuit: in July, the exchange accused the regulator of violating the Freedom of Information Act (FOIA) because it refused to provide orders related to attempts to cut off the crypto industry from the banking sector.

The released documents are unredacted versions of “pause letters” in which the FDIC advises banks to suspend or refrain from using crypto services.

“They show a coordinated effort to stop a wide variety of crypto activity — everything from basic BTC transactions to more complex offerings,” explained Paul Grewal.

Notably, the FDIC itself granted the exchange’s internal document request back in December, but the papers received were heavily redacted. Coinbase then sent a new request for access to earlier versions.

In response, the FDIC published an internal memorandum dated 2022 from its risk management oversight division with guidance on how to approach banks planning to offer crypto services.

The documents submitted by Grewal claim that the FDIC urges banks to avoid using cryptocurrencies, whereas the internal memorandum does not explicitly tell supervisors to do so.

In addition, the FDIC memorandum also contains a template that supervisors can use to respond to banks that notify them of their involvement in cryptocurrency activity.

Late last year, FDIC Chairman Martin Gruenberg said the agency does not prevent crypto firms from accessing banking services. However, banks dealing with cryptocurrency are “subject to supervisory attention,” the official noted.

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