Judge Challenges FDIC on Crypto Transparency
Judge Ana C. Reyes orders the FDIC to revise redactions in Coinbase-related letters, signaling growing scrutiny of anti-crypto practices.
District Court Judge Ana C. Reyes in Washington DC has criticized the Federal Deposit Insurance Corporation (FDIC) for its excessive redactions in Coinbase-related documents from 2022. These letters, which discouraged banks from engaging in crypto-related activities, have sparked concerns within the crypto community about regulatory overreach.
Judge Reyes accused the FDIC of a “lack of good faith” in how it handled the documents, ordering the agency to review and revise the redactions. The court set a firm deadline of January 3 for the updated disclosures, reflecting the judge’s dissatisfaction with the FDIC's approach. This ruling comes after Coinbase made persistent efforts to obtain these documents and subsequently sued the FDIC for greater transparency.
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted the court’s decision on social media, questioning the FDIC's motives. Crypto advocates see these developments as part of a broader debate around “Operation Choke Point 2.0,” a term used to describe perceived anti-crypto efforts within the regulatory framework. The letters, which advised banks to avoid crypto businesses, are seen as a key element of this alleged initiative.
This case unfolds during a time of shifting federal attitudes toward cryptocurrency regulation. FDIC Chair Martin Gruenberg is set to step down by Inauguration Day, and discussions about potential replacements are underway. While no official decision has been made, names such as former Binance.US CEO Brian Brooks have been mentioned. Many in the crypto sector view this leadership change as an opportunity for a more crypto-friendly approach at the FDIC.
Adding to the optimism, Trump’s “crypto czar,” David Sacks, has pledged to prevent another Operation Choke Point. Such commitments suggest that the federal government may be softening its stance on cryptocurrency, encouraging advocates to push for fairer policies.
The legal battle between Coinbase and the FDIC underscores the tension between regulators and the growing crypto industry. However, recent developments offer hope for greater transparency and a more balanced regulatory environment. While the outcome of this case remains uncertain, the evolving attitudes in federal policy signal a potential shift in how cryptocurrencies are treated within the U.S. financial system.
