A lawsuit backed by cryptocurrency exchange Coinbase argues that the Federal Deposit Insurance Corporation (FDIC) may have omitted additional confidential letters sent to banks instructing them to halt crypto-related activities. The claim, which is part of a broader legal action against the FDIC, suggests that the agency may have played a more influential role in the recent banking slowdown for crypto firms than initially believed.
The lawsuit has been initiated by Coinbase and the Crypto Council for Innovation (CCI), a consortium of industry leaders advocating for policy clarity. They alleged that the FDIC has sent out secretive “pause letters” to banks, urging them to stop providing services to crypto-related businesses until a policy review is completed. The claimants argue that these actions have led many banks to abruptly halt their services to cryptocurrency companies, causing significant business disruption.
According to the lawsuit, the FDIC's actions have "injected uncertainty into the banking relationships that cryptocurrency companies depend on to operate." The claimants also believe there may be more such “pause letters” that have not been disclosed by the FDIC. They have requested that the court compels the FDIC to reveal these letters and the names of the banks that received them.
The FDIC, which is an independent agency of the federal government, provides deposit insurance to depositors in U.S. commercial banks and savings institutions. Their alleged interference with crypto-related banking activities has been viewed as detrimental to the growing digital asset industry. This lawsuit aims to shed light on the extent of the FDIC's involvement and the impact it has had on the cryptocurrency sector.
It's worth noting that the legal action comes at a time when the relationship between traditional banking institutions and the burgeoning cryptocurrency sector is under increased scrutiny. If successful, this lawsuit could help bring about greater transparency and understanding regarding the policies and practices influencing this relationship, and possibly pave the way for more cooperative and supportive banking relations for crypto businesses in the future.