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The Federal Deposit Insurance Corporation (FDIC), an independent government agency operating under the federal government in the United States, lost a lawsuit related to cryptocurrencies.
According to Decrypt, the FDIC has effectively lost a lawsuit filed against it for refusing to issue “cease and seek letters” that allegedly forced banks to halt and restrict their cryptocurrency services.
At this point, the FDIC agreed to pay $188,440 in legal fees and revise its public disclosure policy to resolve Coinbase’s Freedom of Information Act (FOIA) lawsuit.
According to experts, this agreement ends a multi-year legal battle over the Freedom of Information Act, while revealing dozens of “cease and desist letters” from the FDIC ordering banks to cease cryptocurrency-related activities.
The issue at hand in this case is documents sent by the FDIC to banks, referred to as “cease and seek letters.” These documents requested that banks refrain from offering new services related to cryptocurrencies or expanding their existing businesses. Coinbase confirmed the existence of these documents and requested their disclosure, but the FDIC refused to release them.
The court ruled that the FDIC’s response was inadequate. It also stated that the FDIC violated the Freedom of Information Act by concealing all documents at once, claiming that “such documents are not subject to disclosure,” without examining each document individually.
Coinbase Chief Legal Officer Paul Grewal stated in a press release following the settlement with the FDIC, “The years of litigation were worth it. This confirms that documents telling banks to stay away from cryptocurrencies did indeed exist.”
*This is not investment advice.