- The FDIC faces criticism for withholding details about its role in Operation Chokepoint 2.0 during the Biden administration.
- Coinbase’s legal team claims the FDIC has refused to release key documents and has heavily redacted requested records.
- Coinbase pushes for further transparency, asking the court to compel the FDIC to testify about its actions during Operation Chokepoint 2.0.
Federal Deposit Insurance Corporation (FDIC) is being criticized on allegations of secrecy on its role in Operation Chokepoint 2.0. The operation reportedly took place while the Biden administration was in office and has received hatred from the public. Paul Grewal, the Chief Legal Officer of Coinbase has stated that the FDIC has failed to reveal important facts concerning their activities at that period.
Operation Chokepoint 2.0 was revealed in early 2023 after the crypto-friendly banks failed. This made many people to think that the government had forced banks to cut off its relationship with the cryptocurrencies. Some of them included Venture capitalist Nic Carter who stated that the government was leading a concerted effort in order to deprive participants in the crypto-sector of their ability to bank.
Coinbase Demands FDIC Clarity
Nevertheless, the FDIC has declined to open its books to the public, even when called for it by new changes in policies. In an In a series of comments Grewal made on the social media platform ‘X’ on March 8, Grewal complained that the agency does not respond to requests for clarifications. He said, “They have not understood the message.” Coinbase had demanded that the FDIC avail to it details on how the agency undertook the ‘due diligence’ exercise during the operation but the agency has refused.
Coinbase’s legal team has also used a FOIA request to seek certain information. To this end, they want to make certain that no documents related to the Operation Choke-Point 2.0 program are shredded. Nevertheless, as Grewal said, the FDIC has not produced all the requested records; most of them have been partially blacked out. He said that 53 pages of the two documents were redacted completely which made the document almost indecipherable.
Coinbase Pushes for Transparency
Another concern has been raised by the FDIC’s lack enthusiasm in sharing information. Such decisions are being made shortly after the U.S. Office of the Comptroller of the Currency (OCC) eased its positions on crypto regulation. This came after President Donald Trump declared in a White House Crypto Summit that the operation known as Operation Chokepoint 2.0 will be shut down.
Grewal also made comments regarding the lack of responses to Coinbase’s FOIA requests from the FDIC. As per him, the agency has shared samples of only a couple of documents unrelated to the issues raised by Coinbase. The two main factors of this case have raised eyebrows over what the agency might be concealing from the public.
Coinbase has urged the court to compel the FDIC to give deposition as it seeks to continue with the probe. In addition, the company filed a new FOIA request to the SEC about enforcement actions against crypto firms within the period of April 2021 to January 2025.