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Coinbase CLO Supports Paul Atkins for Securities and Exchange Commission (SEC) Leadership

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  • Coinbase CLO supports Paul Atkins, highlighting his push for regulatory clarity and innovation in digital assets.
  • Atkins and Jonathan Gould promise to put an end to “debanking,” seeking to reinstate basic financial principles in regulations.
  • Atkins’ $327M net worth is raising conflict-of-interest concerns, with Senator Warren questioning his Wall Street ties.

The nomination of Paul Atkins as the next chairman of the U.S. Securities and Exchange Commission (SEC) has ignited strong reactions from both supporters and critics. Among the most vocal supporters is Coinbase’s Chief Legal Officer (CLO), Paul Grewal, who attended the Senate Banking Committee hearing on Atkins’ confirmation.

Support from Coinbase and the Crypto Industry

Coinbase CLO emphasized that Atkins’ leadership could bring much-needed clarity to digital asset regulations. Grewal tweeted on March 28 that he attended the Senate hearing and shared some points, like Atkins’ pledge to transparency and where he stands on innovation. Atkins said that regulatory clarity will enhance U.S. leadership in financial technology globally.

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Paul Grewal on X

Atkins restated that under his management, digital assets will receive focused attention. He pointed out that traditional and unnecessarily difficult regulations have stifled development and capital growth. This is in line with Grewal’s support that was directed towards having more protective measures that could foster new markets for investment in the country as long as the citizens were well guarded on purpose, which placed America at the front line of innovation and technology.

Atkins and Jonathan Gould, the nominee for the Office of the Comptroller of the Currency (OCC), have both pledged to eliminate the popular and unpopular form of depersonalized banking referred to as ‘debanking’. Both officials are deem undemocratic and committed themselves to restoring core financial values within the supervisory bodies.

Atkins Faces Scrutiny Over Coinbase Ties

Despite strong industry support, Atkins’ nomination has been opposed, in particular by Senator Elizabeth Warren. She was troubled by his connection to Wall Street and digital asset firms, including his past association with figures like Sam Bankman-Fried. Warren argued that Atkins’ financial connections could lead to conflicts of interest.

Warren questioned Atkins at the hearing about his role in the 2008 financial crisis, accusing him of downplaying systemic risks. Atkins responded by defending his record, attributing the crisis to issues in the subprime mortgage market, especially at Fannie Mae and Freddie Mac. Atkins also committed to stepping down from his firm, Patomak Global Partners, within 90 days of confirmation.

Warren’s interests extended into Atkins’ investments as well. Public disclosures put the value of his interest in Patomak at $25 million, and his net worth overall at over $327 million. Critics worry that divesting his investments may not eliminate the potential for conflicts, prompting demands for more transparency about the sales process.

While the crypto industry welcomes Atkins’ regulatory approach, opposition from Democrats, especially Warren, may pose hurdles to his confirmation. However, with the Senate controlled by the GOP, Atkins’ nomination is likely to proceed, opening the for a new era of digital asset regulation focused on innovation and market development.

Read More: Coinbase CLO Criticizes the US Treasury for Over Tornado Cash Sanctions

XRP Legal Experts Slam Coinbase’s Self-Interest in SEC Fight

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  • XRP lawyer Bill Morgan criticized Coinbase for staying silent during Ripple’s SEC battle.
  • Morgan said Coinbase only reacted when the SEC filed a case against them.
  • Fred Rispoli accused Coinbase of acting out of profit and not for the community.

Coinbase faces strong criticism from XRP lawyers amid ongoing tensions surrounding the Ripple vs SEC lawsuit. Legal experts accuse the crypto exchange of prioritizing its interests over community welfare. As Coinbase responds to its own legal challenges, pro-XRP voices highlight its earlier silence in the Ripple case.

XRP Lawyer Bill Morgan Accuses Coinbase of Selfish Silence

Bill Morgan an XRP legal expert expressed his disapproval of Coinbase’s silent approach toward Ripple’s ongoing legal fight with the SEC which began in 2020. The exchange became involved in the debate after the SEC specifically targeted it. Morgan established that Coinbase chose this moment because it reflected their personal goals instead of community support.

Morgan pointed out that Ripple received no legal backing from Paul Grewal and his team during a crucial moment of its legal fight. He stated that their avoidance of intervention harmed the Ethereum community’s initial struggle to take a legal position against the SEC. Morgan launched a fresh round of attacks against the cryptocurrency exchange through his commentary.

With national recognition of the Ripple controversy, several pro-XRP advocates hoped major cryptocurrency platforms like Coinbase would demonstrate more backing. The CEO stated that Coinbase executed no support actions, although Ripple took sole responsibility. He stated that during this period, Coinbase maintained its silence until the Securities and Exchange Commission forced it to take legal action.

Fred Rispoli Slams Coinbase for Profit-Driven Actions

Lawyer Fred Rispoli supported these concerns by stating identical points about Coinbase conducting its operations for profit without considering community matters. He denounced the exchange for following profit-related concerns without consideration of community needs. Rispoli noted that Coinbase never advertised itself as an organization that protects cryptocurrency users.

According to him the restrictive Coinbase terms of service proved contradictory to the exchange’s public identity. Rispoli suggests that controlling user behavior stands above user empowerment in the policies that Coinbase implements. According to his remarks Coinbase established its business framework from the beginning to work in favor of corporations.

The SEC lawsuit prompted Coinbase to start promoting crypto reform measures since it affected the exchange’s operations. Coinbase’s late reaction proved it did not provide early backing to Ripple alongside other industry partners. According to Rispoli, their current advocacy work seemed insincere due to his explanation.

Coinbase Responds as Community Voices Grow Louder

Paul Grewal from Coinbase described the pivotal support from Ripple allies while discussing it with MetaLawMan in his latest interview. Grewal expressed appreciation toward Stuart Alderoty and John Deaton, who initially fought the SEC before Coinbase joined the effort. From Grewal’s words, we can infer he acknowledges Ripple’s initial fight for its cause. However, several people argue the company’s efforts commenced too late.

During a recent interview with MetaLawMan, he defended that Ripple had existed as a solitary entity in legal battles for numerous years before others chose inaction. He emphasized that the crypto industry must demonstrate support for Ripple’s legal efforts despite member allegiance differences. His statement reflected an increasing call for cooperation from the crypto sector.

Coinbase CLO Criticizes the US Treasury for Over Tornado Cash Sanctions

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  • U.S. Treasury lifts Tornado Cash sanctions after blacklisting it in 2022 for laundering $7 billion.
  • Coinbase CLO Paul Grewal criticizes the Treasury for sidestepping a court ruling on Tornado Cash.
  • Legal uncertainties remain as Grewal warns of potential reimposition of Tornado Cash sanctions.

On Friday, the U.S. Treasury lifted sanctions on crypto mixer Tornado Cash, accused of laundering over $7 billion, including funds linked to North Korean hackers. The Treasury had blacklisted the platform in 2022, citing its role in laundering $455 million stolen by the Lazarus hacking group.

Coinbase CLO Criticizes Treasury’s Move

However, the decision has sparked strong criticism. Coinbase Chief Legal Officer (CLO) Paul Grewal publicly condemned the Treasury for its handling of Tornado Cash’s delisting. In a strongly worded X post, he argued that the Treasury is attempting to sidestep a final court ruling on the case, which undermines legal procedures.

Grewal asserted that the Treasury’s recent filing seeks to moot the need for a final judgment, claiming the case is no longer relevant after Tornado Cash’s removal from the Specially Designated Nationals (SDN) list. However, he pointed out that such a filing is only valid if the defendant can prove the issue won’t recur.

The Coinbase CLO highlighted past cases where sanctions were lifted, yet the cases remained open, enabling the government to reimpose sanctions at will. He stressed that the Treasury has not provided any assurance that Tornado Cash won’t be blacklisted again in the future.

Coinbase, Ethereum Foundation Support Tornado Cash

Grewal’s criticisms come amid an ongoing court battle. Users of Tornado Cash contested the Treasury’s action of adding the platform to the SDN list, claiming that its smart contract does not qualify as a property under the IEEPA because it is immutable.

The court sided with the users, ruling that Tornado Cash’s smart contract does not qualify as property under IEEPA. Despite the legal arguments aside, Grewal reproached the Treasury for not fully complying with the court order and for continuing to try and evade a legal resolution to the case.

Tornado Cash has gained plenty of attention from Coinbase and the Ethereum Foundation, who have been funding the legal defense of lead developer Alexey Pertsev. Other participants in the cryptocurrency market contend that the Treasury’s stance was too harsh and ungrounded.

The removal of sanctions from Tornado Cash marks a significant milestone in the ongoing potential regulation of crypto mixers. The uncertainty about the Treasury’s future actions, along with the legal ambiguity that still exists, might reimpose sanctions in the future, fueling the debate on the legal status of Tornado Cash.

Read More: Coinbase in Advanced Talks to Acquire Crypto Derivatives Exchange Deribit

Coinbase in Advanced Talks to Acquire Crypto Derivatives Exchange Deribit

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  • Coinbase plans to acquire Deribit, the largest Bitcoin and Ether options platform.
  • Deribit’s valuation could reach between $4B and $5B amid acquisition talks.
  • The deal would expand Coinbase’s presence in crypto derivatives.

Coinbase is in advanced discussions to purchase Deribit, a major crypto derivatives exchange. The talks are in advanced stages and the companies have notified Dubai regulators about the potential business acquisition. Deribit , a top Bitcoin and Ether options platform, holds a Dubai regulatory license which will be transferred to Coinbase if the acquisition is finalized.

Coinbase Set to Acquire Deribit

Deribit sought financial advisory services early this year to explore attractive business opportunities. These efforts attracted the attention of various potential buyers like Kraken but the firm decided to abort the acquisition process. The market value of Deribit is estimated between $4 billion and $5 billion although this figure could change based on the outcome of the current discussions.

A successful acquisition will boost the platform’s strength within the competitive crypto derivatives markets. The acquisition of Deribit would allow Coinbase to broaden its futures offerings to include options trading capabilities on its derivatives platform. Deribit reached a total trading volume of $1.2 trillion in 2024 which demonstrates its leading position in the crypto derivatives sector.

Crypto derivatives trading has witnessed substantial growth across the market, especially in the United States. In 2024 Coinbase recorded a 10,950% growth in derivatives trading volume which demonstrates growing market demand. The Deribit acquisition reflects the exchange’s plan to capitalize on the expanding derivatives market.

Crypto Derivatives Trading Trend

Other market participants continue to pursue opportunities to establish their positions within the derivatives sector. Kraken recently revealed its plans to purchase trading platform, NinjaTrader for $1.5 billion. Major exchanges such as Coinbase and CME Group witnessed substantial market growth due to the rise in popularity of crypto futures and options.

Crypto derivatives continue to experience increased demand from institutional and retail investors. Futures contracts enable traders to buy and sell assets at fixed future dates in advance through leveraged arrangements. Options offer traders the flexibility to sell and buy assets at specific prices.

Major exchanges continue to explore acquisitions and new product solutions. The potential acquisition of Deribit demonstrates Coinbase’s dedication to expand its derivatives trading options. This acquisition could set a precedent for similar transactions in the crypto derivatives markets.

Additionally, Coinbase has added new products which include Solana futures contracts in its portfolio. Solana futures saw a major market development after the US Commodity Futures Trading Commission established regulations for these contracts. The rising demand for crypto derivatives motivates more exchanges to participate and enhance the sector’s growth.

Coinbase Pushes SEC for Clear Crypto Rules: 36 Key Recommendations

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  • Coinbase has responded to SEC Commissioner Hester Peirce’s request for information, emphasizing four key regulatory priorities.
  • The SEC’s ongoing crypto initiatives signal a shift toward clearer regulations for digital assets in the U.S.
  • Coinbase outlines 36 recommendations to shape a structured and transparent framework for crypto markets.

Coinbase has taken a proactive step in addressing digital asset regulations by responding to SEC Commissioner Hester Peirce’s request for information. This response highlights critical elements necessary for a structured regulatory framework.

Coinbase’s recommendations focus on establishing a clear taxonomy to differentiate digital commodities from securities, ensuring that secondary market sales of digital commodities are not classified as securities transactions, and deferring certain regulatory ambiguities to Congress.

The company underscores the importance of regulatory clarity, particularly in a time when the U.S. is witnessing growing engagement from policymakers.

Recent developments, including the President’s executive order and active discussions in Congress on stablecoin regulations, indicate that the regulatory landscape is evolving.

Additionally, the SEC’s crypto Task Force is making strides in modernizing securities markets and integrating digital asset innovation into existing financial structures.

Coinbase Advocates for Tokenized Securities

Coinbase’s response follows up on its 2022 call for more transparent crypto regulations. The exchange highlights that a clear and cooperative framework is important to provide regulatory clarity to developers, players in the industry, and investors.

The SEC’s function in regulating digital assets is essential and Coinbase’s recommendations offer a realistic blueprint to harmonize innovation with investor protection.

The 36 recommendations that were submitted by Coinbase have four primary elements: creating categories of digital assets, bringing clarity to secondary market sales, deferring determinations of market structure to Congress, and enabling markets to build out the promise of tokenized securities.

The organization emphasizes that regulatory clarity will drive on-chain adoption at a faster pace and create a more inclusive and digitized financial ecosystem with U.S. leadership.

Coinbase also emphasizes the importance of targeted regulatory relief to allow blockchain technology to fit into securities regulations. The recognition of the economic potential of tokenized securities would lead to new business opportunities in digital assets trading, investment funds, and decentralized finance.

The transaction argues that enabling real-time settlement, self-custody, and effective asset transfer would be extremely beneficial to legacy financial institutions as well as to crypto-native businesses.

SEC’s Engagement Signals Shift in Crypto Regulation

Coinbase sees that this is a cooperative effort as regulatory negotiations gain momentum. The fact that it is willing to cooperate with industry participants is a regulatory turning point that augurs well with potential progress in regulating digital assets.

This dialogue will require ongoing involvement between policymakers, banks and other financial institutions, and cryptocurrency businesses to develop a realistic and fair regulatory framework.

Related | Ethereum Vs Bitcoin: Will ETH Find Reversal at Critical Support Levels?

Coinbase Dominates ETH Staking with 11.42% Control, Raising Concerns

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  • Coinbase has become the largest individual Ethereum validator, controlling 11.42% of the total staked ETH.
  • The company now operates 120,000 validators and manages approximately 3.84 million staked Ethereum tokens.
  • Coinbase reported a 99.75% participation rate with zero slashing or double signing, ensuring security for staked assets.

Coinbase has solidified its position as the largest individual Ethereum validator, controlling 11.42% of the total staked ETH. The company now operates 120,000 validators, managing approximately 3.84 million staked Ethereum tokens. This development raises concerns about centralization, even as Coinbase emphasizes transparency and security in its staking operations.

Coinbase’s Validator Performance and Security Measures

The Ethereum Validator Performance Report from Coinbase shows operational metrics that demonstrate a 99.75% participant rate and maximum uptime. Security remains a top priority at Coinbase because the company recorded no errors when signing transactions or conducting slashing incidents. Through its asset protection system, Coinbase keeps users’ funds safe from potential penalties.

Coinbase protects against risks by deploying its validators in different geographical locations connected to AWS and GCP cloud providers. This implementation method increases network reliability while decreasing service interruptions. The company establishes multiple execution and consensus clients to prevent the development of single points of failure throughout the system.

Users who stake their ETH must consider security issues because slashing penalties can reduce their stakeholding rewards. Strategies at Coinbase to prevent penalties result in somewhat reduced returns, but they help ensure penalty avoidance, thus matching the security standards of other exchanges. The security and stability benefits achieved through its approach are favorable for participants who stake with the platform.

The continuous growth of Coinbase Ethereum staked assets threatens to diminish the network’s decentralization characteristics. Coinbase leads all staking providers through its possession of 11.42% of total staked ETH, which makes it the largest individual validator in the Ethereum network. Despite its transparent nature, the platform expands its control over Ethereum governance operations.

Certain community members show caution over network security issues that could result from centralized systems. The high level of stakeholdings within a single entity boosts network security risks. Multiple stakeholders believe Ethereum needs further validation procedure distribution to preserve its decentralized structure.

The relationship between Lido and Coinbase comes into focus according to Ethereum educator Sassal who also recognized Lido’s position as the leading collective staking entity. The basis of Lido’s system allows users to spread their stake among various node operators, whereas Coinbase solely belongs to one operational entity. The decentralized staking models show apparent differences from the centralized model, which this specification reflects.

Market Conditions and Coinbase’s Recent Developments

Coinbase’s announcement emerges during a period when centralized exchanges witness decreased visitor numbers, including those accessing Binance and its associated platforms. Recent statistical information indicates such exchanges have experienced a user activity decline of approximately 30% because of the overall market instability. Coinbase maintains its service expansion efforts because it seeks to capture retail investors together with institutional investors.

The company entered the market by introducing Verified Liquidity Pools, which aim to boost trading performance levels for its customers. Coinbase implemented this change to enhance its presence in the crypto market. Despite market conditions and regulatory obstacles, Coinbase maintains its innovation trajectory.

A successful court outcome happened for Coinbase when the SEC terminated its major lawsuit against the company. The legal dispute produced uncertain conditions for Coinbase and the complete crypto business ecosystem. After removing the legal limitation, Coinbase now has an opportunity to grow staking operations and trading services.

Coinbase Expands Futures Market With Cardano and Natural Gas Contracts

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  • Coinbase seeks CFTC approval to launch Cardano (ADA) and Natural Gas (NGS) futures, expanding into crypto and energy markets.
  • If the CFTC raises no objections, these futures contracts will go live on March 31, reinforcing Coinbase’s regulated trading offerings.
  • ADA futures enable traders to speculate on Cardano’s price without holding the asset, while NGS futures position Coinbase in commodity markets.

Coinbase is seeking approval to list Cardano (ADA) and Natural Gas (NGS) future contracts. This addition of offerings for the energy and crypto markets would be achieved if the U.S. Commodity Futures Trading Commission (CFTC) gives them approval. They would be listed on March 31 if they are approved. This is part of the efforts of Coinbase to cover more traders.

Coinbase Derivatives has submitted self-certification documents with the CFTC for NGS and ADA future contracts. Under the self-certification, the contracts are declared to be in compliance with regulations. Pending no objection from the CFTC, they are set to become live on March 31. Coinbase is further expanding its platform with crypto and traditional future offerings.

One of the leading blockchain platforms with the most scalability, sustainability, and security is Cardano (ADA). With the launch of ADA futures, traders are now able to trade on the price of Cardano without necessarily owning the asset. This opens up the possibility of advanced risk management and leverage.

The current price of Cardano at the time of writing is $ 0.7394 with a 24-hour trade volume of $ 1.82B. It has increased 2.92% within the last 24 hours.

ADA 1D graph coinmarketcap 3

Coinbase’s Bold Move with ADA and NGS Futures

The Exchange is also entering the energy sector with the launch of Natural Gas (NGS) futures. Natural gas is of vital importance to global markets, and Coinbase is looking to capitalize on this commodity. Traders will be able to bet on natural gas prices through the introduction of these futures. This puts the Exchange as a player in crypto as well as energy markets.

The introduction of regulated future contracts would assist the SEC in approving crypto ETFs. Futures contracts provide a secure platform for price discovery and risk management. Grayscale has already applied for a spot in the Cardano ETF, which may be approved in the future. The SEC is keeping close watch on increasing regulatory transparency in such markets.

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Coinbase’s entry into listing ADA and NGS futures is one of the biggest forays into the energy and crypto markets. If approved, the contracts take effect on March 31 and change the way traders trade the asset classes. The Exchange is once again positioning itself as the leader at the intersection of traditional finance and digital assets. It is one of the steps towards solidifying its role in the new world of trading.

Related |  VanEck Files for Avalanche ETF, Targeting Institutional Exposure to AVAX

Vermont Ends Coinbase Staking Case, Following SEC’s Decision to Withdraw Lawsuit

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  • Vermont drops Coinbase case after SEC abandoned similar action on February 28, 2024.
  • Coinbase urges other states to follow Vermont in recognizing staking isn’t security.
  • SEC’s crypto retreat follows Gensler’s resignation on January 20, signaling regulatory shift.

Vermont’s Department of Financial Regulation has abandoned its legal action against Coinbase, which accused the exchange of offering unregistered securities through its staking service. This decision, announced on March 13, follows the U.S. Securities and Exchange Commission’s (SEC) move to drop its own case on February 28.

The state’s regulatory authority pointed to the potential introduction of new federal guidelines as a primary reason for its decision. “In light of the dismissal of the Federal Action and likelihood of new federal regulatory guidance, the Division believes it would be most efficient and in the best interests of justice to rescind the pending Show Cause Order, without prejudice,” the department stated.

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Source: Vermont’s Department of Financial Regulation

Coinbase, which has long insisted that staking does not classify as a security, welcomed Vermont’s decision. Chief Legal Officer Paul Grewal took to X on March 13, urging other states to follow suit.  “staking services are not securities. We applaud Vermont for embracing progress and providing clarity for its citizens who own digital assets,” Grewal added.

Regulatory Shift in Coinbase Staking Case

The controversy dates back to June 2023, when the SEC sued the exchange, prompting several states—Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin—to take parallel legal action. They issued show cause orders, alleging it violated securities laws by providing staking services without a license.

The order required the exchange to provide a reason why the courts shouldn’t order them to halt the service. Vermont has now stepped back, signaling a potential shift in how regulators may approach staking moving forward.

Grewal sees this as an opportunity for broader regulatory change. “Our work isn’t over,” urging Congress to capitalize on growing bipartisan support in both chambers to enact comprehensive legislation. Policies must address the unique characteristics of digital assets, including staking, to ensure effective regulation, he stressed.

Broader SEC Retreat on Crypto Cases

Vermont’s decision comes as the SEC has been retreating from several high-profile crypto enforcement actions. The change comes after the resignation of former SEC Chair Gary Gensler, recognized for his firm approach toward cryptocurrency, who stepped down on January 20.

Meanwhile, a legal matter concerning the cryptocurrency trading firm Cumberland DRW reached its conclusion, with the SEC dropping charges on March 4. Additionally, the extended legal battle between Ripple Labs and the SEC, which has persisted for over four years, seems to be nearing its final stages.

The exchange is seeking more transparency on past SEC actions. It has filed a Freedom of Information Act request to uncover how many crypto-related enforcement actions occurred under Gensler’s leadership and their cost to taxpayers.

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Coinbase Registers with India’s Financial Intelligence Unit

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  • Coinbase secures FIU registration, expanding crypto services in India.
  • Plans to launch retail services and expand investment in India.
  • Company aims to empower crypto developers and entrepreneurs with innovative tools.

Coinbase has officially registered with India’s Financial Intelligence Unit (FIU) to enable the exchange to offer crypto trading services in the country. This registration establishes the company’s presence in one of the world’s most dynamic markets for cryptocurrency. The exchange plans to launch its retail services in India later this year, with further investment and product offerings.

Coinbase Expands Operations in India 

India is emerging as a global technology hub which has attracted a growing number of crypto developers. Coinbase’s decision to enter the Indian market highlights the country’s role in blockchain and crypto innovation. The firm’s registration with the FIU shows a commitment to comply with local regulations and foster responsible growth in the region.

India’s developer community has shown significant growth in recent years. The country’s share of global developers in the blockchain space has risen from 3% in 2018 to 12% in 2023. Coinbase views this growth as a major opportunity to support local developers and entrepreneurs to build global crypto solutions from India.

Moreover, Coinbase aims to provide access to its trusted platform and tools like Base with the company’s expansion to India. These resources will allow Indian entrepreneurs to innovate locally as well as scale their projects globally. The company believes that crypto can enhance economic freedom and technological advancement.

Coinbase’s expansion aligns with the company’s mission to increase economic independence worldwide. The exchange seeks to create a vibrant ecosystem for crypto and blockchain development in India. This is part of the company’s vision to enable developers to grow their local markets and achieve global success.

International Expansion

The company’s commitment to India extends beyond its regulatory registration. Coinbase’s Chief Legal Officer, Paul Grewal, recently joined the Board of the U.S-India Business Council (USIBC). This appointment underscores the company’s dedication to strengthen the U.S-India economic relations and enhance cross-border commercial growth.

Coinbase’s registration with the FIU marks a major step in its long-term international expansion strategy. The company aims to offer crypto services in a safe and compliant environment that adheres to local laws. The registration enables the exchange to offer crypto trading India’s market, where the demand for digital assets continues to rise.

Coinbase aims to contribute to India’s efforts to become a leader in blockchain and crypto innovation. The company works closely with regulators to ensure the responsible development of the industry and offer secure trading platforms for users in India. 

Is the FDIC Covering Up Operation Chokepoint 2.0? Coinbase Pushes for Clarity

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  • 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.