Coinbase has uncovered more than 20 instances in which the United States Federal Deposit Insurance Corporation (FDIC) advised banks to avoid offering crypto-related services.
On November 1, Coinbase’s Chief Legal Officer, Paul Grewal, reported finding at least 23 FDIC letters that discourage banks from engaging in crypto-related activities.
FDIC Has Been Cautioning Banks Against Crypto Since 2022
Grewal explained that this discovery resulted from the firm’s recent Freedom of Information Act (FOIA) request. This initiative aimed to examine the FDIC’s influence on US banks’ decisions regarding crypto services and the regulator’s role in Operation Chokepoint 2.0.
Grewal emphasized the concerning nature of these letters, calling them a “shameful example” of government agencies aiming to limit financial access to crypto companies. He underscored the public’s right to transparency rather than a regulatory body operating “behind a bureaucratic curtain.”
The FDIC’s Vaughn Index details a series of communications in which the agency warns banks of perceived risks associated with crypto. The documents cite concerns around consumer protection, financial stability, and institutional security. As early as March 2022, the FDIC was already advising some banks to hold off on new crypto initiatives pending further assessments on safety and compliance.
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Author: Oluwapelumi Adejumo
