Banks set up against bitcoin and cryptocurrencies… The news came at the end of last week. According to documents revealed by Coinbase, the Federal Deposit Insurance Corporation (FDIC) reportedly asked several financial institutions to suspend their activities related to cryptocurrencies. This revelation, resulting from a lawsuit filed by Coinbase, reignites tensions between defenders of the crypto sector and regulators. We take stock.
The letters, obtained by Coinbase after a bitter legal battle, show that the FDIC had issued guidance as early as mars 2022 asking banking institutions to “pause all their activities related to cryptocurrencies”.
One of these letters, heavily redacted, indicates that the FDIC had not yet finalized its regulatory guidance regarding these activities. She therefore asked the banks totemporarily stop their services pending clarification.
Paul Grewal, Coinbase’s chief legal officer, called the move “deliberate attempt to curb the crypto industry”alluding to what the community calls “Operation Chokepoint 2.0” — a nod to the 2013 events aimed at restrict banking access to sectors deemed to be at risk.
“I am very proud of the team that pursued these Freedom of Information requests, despite countless FDIC denials, appeals and even a federal lawsuit. We are only at the beginning. We will continue to push for full clarity and transparency from the government, including unredacted versions of these letters, by any appropriate means necessary. »
Paul Grewal – Source : X
Coinbase digs up the hatchet
The FDIC, whose main role is to insure bank deposits and supervise financial institutions, has come under fire.
Many in the crypto industry view this position as a attempt to stifle institutional adoption of cryptocurrencies.
As more banks become interested in these assets, these measures could slow their integration into traditional financial services.
The FDIC has in the past said it would not discourage banks from offering services to crypto businesses, but published documents tell a different story.
Coinbase, through its lawyers, continues to push for the full versions of the letters, believing their contents could reveal even deeper interference.
“Government institutions should be able to access banking services without government interference. The incoming administration has the opportunity to reverse many poor cryptocurrency policy decisions, including, first and foremost, politically motivated regulatory decisions such as Operation Chokepoint 2.0.
Paul Grewal – Source : X
Silvergate: a precedent that resonates
The case of Silvergate Bank, a major player in the crypto banking sector, illustrates the growing tensions between traditional financial institutions and regulators. Closed in March 2023, Silvergate specialized in business services related to digital assets.
According to Chris Lane, former CTO of Silvergate, the bank suffered a “ change of rules » imposed by regulators, who would have limited dollar deposits linked to crypto clients. This brake would have shaken the economic model of the bank, already weakened by the general crisis in banking regions and the collapse of FTX.
David Sacks, the future “Crypto Czar” of Donald Trump’s government, recently called for an investigation into what he himself describes as “Operation Choke Point 2.0”, citing the numerous “stories of damage” caused by these alleged measures.
This statement adds weight to the idea that the actions of regulators, far from being simple prudential adjustments, could be part of a more coordinated strategy to curb the rise of cryptocurrencies.
For now, the crypto community is on hold. If regulation is essential for a healthy ecosystem, let’s be pragmatic, it must also allow innovation to flourish. The recent appointment of Paul Atkins as head of the SEC in the USA could somewhat unsettle the sector. To be continued, on the Journal du Coin.
