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Ana C. Reyes, the District Court judge for Washington DC, rebuked the Federal Deposit Insurance Corporation (FDIC) for a “lack of good faith” in publicizing its 2022 Coinbase letters.
Reyes claimed that the Corporation performed excessive redactions in these letters and ordered them to release more complete versions. These letters were only publicized after persistent efforts from the exchange.
Coinbase vs FDIC
Paul Grewal, the Chief Legal Officer at Coinbase, publicized these court proceedings today via social media. Last month, Coinbase exposed more than 20 letters that the FDIC sent to various banks in 2022. These letters advised the banks to avoid all crypto-related businesses.
However, the Corporation excessively redacted these letters, prompting Judge Reyes’ annoyance.
“The Court is concerned with what appears to be the FDIC’s lack of good-faith effort. Defendant cannot simply blanket redact everything…The Court ORDERS [emphasis hers] Defendant to re-review the documents, make more thoughtful redactions, and provide the new redactions to Plaintiff by January 3,” Reyes ruled.
Coinbase is currently suing the FDIC, prompting this official judgment. After Grewal relayed this statement to social media, he asked, “what is the FDIC working so hard to hide?”
Meanwhile, several prominent figures in the crypto community have raised concerns about “Operation Choke Point 2.0”, citing it as a new anti-crypto regulatory effort.
An attorney in the comments of Grewal’s post noted that this immediate deadline is a clear sign of Judge Reyes’ displeasure. In simple terms, an unprecedented new friendliness for cryptocurrency is currently circulating through the US federal government. Already, Trump’s “crypto czar,” David Sacks, has vowed to stop another Operation Choke Point.
Furthermore, FDIC Chair Martin Gruenberg is set to resign by Inauguration Day, and the crypto industry has eyed possible replacements for months. President-elect Trump has not named his choice yet, but former Binance.US CEO Brian Brooks was mentioned.
Overall, the FDIC will soon likely become much more conciliatory than when it sent the Coinbase letters. There is no further information on when the legal battle between Coinbase and the FDIC will be resolved.
Nonetheless, this development is an encouraging sign. When the Corporation initially tried to foment anti-crypto biases in the banking sector, it acted in a very different environment. A second Operation Choke Point would face stiffer resistance and scrutiny.