Coinbase legal head accuses FDIC of blocking crypto banking opportunities
According to Coinbase’s Chief Legal Officer Paul Grewal, the Federal Deposit Insurance Corporation (FDIC) is allegedly pressuring banks to stop providing services to crypto firms through the use of “pause letters.”
Grewal claims that documents obtained through Freedom of Information Act requests show that the FDIC has instructed banks to delay or cease services for crypto companies, hindering their growth in the industry.
In a tweet, Grewal described the FDIC’s actions as an attempt to restrict financial access to legitimate American businesses, unfairly targeting lawful crypto firms by limiting their access to essential banking services.
The documents shared by Coinbase revealed that the FDIC urged banks to avoid launching or expanding crypto-related services citing concerns over safety, soundness, and potential consumer risks.
These actions by the FDIC have been likened to “Operation Chokepoint 2.0” by Grewal, drawing similarities to a past government initiative that aimed to cut off high-risk industries access to banking services.
Critics argue that regulators are adopting a similar approach with crypto firms, hindering their growth without explicitly banning them from the market, ultimately pushing some companies to seek alternative financial solutions abroad.
With regulatory pressure from agencies like the FDIC and SEC increasing, concerns are rising about a potential “crypto cold war” developing in the United States.
Crypto market movers
Bitcoin is down 2% over the past 24 hours, trading at $68,325, while Ethereum is down 2.2% to $2,448.
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Kyle Baird is DL News’ Weekend Editor. Have a tip? Email him at kbaird@dlnews.com.
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