In summary
- The FDIC published 23 letters that revealed direct instructions to member banks to stop Cryptocurrency-related activities in 2022.
- Coinbase interpreted the documents as evidence of an alleged covert war against cryptocurrencies, although the letters did not mention debanking.
- Multiple executives in the crypto sector shared experiences of losing banking access, coinciding with Marc Andreessen’s revelations.
Coinbase declared its claim on Friday, claiming that newly revealed correspondences between the Federal Deposit Insurance Corporation (FDIC) and member banks help prove that the US government has been secretly waging a war on cryptocurrencies for years.
But what exactly do the documents reveal?
Coinbase has long pushed for the FDIC to reveal how it has communicated with US banks about cryptocurrencies. On Friday, the company—and the public—got some answer to that question, when the FDIC released 23 letters it sent to member banks about cryptocurrencies in 2022, pursuant to a Freedom of Information Act (FOIA) request filed by Coinbase. ).
The strongly worded letters show how the FDIC instructed banks considering cryptocurrency-related products and services to refrain from offering those activities until the agency determined how to properly regulate them.
“We respectfully ask that you pause all activity related to cryptoassets,” the FDIC instructed a bank in March 2022.
The letters reveal that the FDIC made several similar calls to banks across the United States in 2022.
While it was previously known that the FDIC instructed all banks under its supervision in early 2022 to immediately inform the agency of any plans to engage in “cryptocurrency-related activities,” it was unclear whether the FDIC had specifically instructed banks to stop such activity.
In multiple FDIC letters released Friday, the agency said it would reach a verdict on the permissibility of such cryptocurrency-related activities only after completing a detailed review. The letters do not reveal whether the FDIC ever completed such a review, or what the conclusion of that process might have been.
Paul Grewal, Coinbase’s chief legal officer, celebrated the revelations on Friday, arguing on The US government has not only discouraged major financial institutions from trading cryptocurrencies for years, but has also debanked crypto companies and executives as a means of strangling the industry.
“American businesses that follow the law should be able to access banking services without government interference,” Grewal wrote in X on Friday.
But none of the FDIC letters released Friday mention policies related to unbanking customers involved in cryptocurrencies. They only seem to discuss the possibility of US banks getting involved in offering cryptocurrency-related services on their own.
Decrypt contacted Coinbase about that potential tension; A company spokesperson said Grewal’s post on X stated the company’s position on the issue.
However, a source familiar with the company’s thinking told Decrypt that while the FDIC letters did not explicitly mention debanking, one could reasonably conclude that banks concerned about following the agency’s instructions to halt “activities” related to cryptocurrencies” could have frozen the accounts of crypto companies and executives, to proactively ensure that they do not get into trouble or lose FDIC support.
“Think about the uncertainty those banks must have felt upon receiving those letters,” the source said.
The source added that while they found the revelations in Friday’s FDIC letters to be “quite notable,” they are confident there is more evidence to be found that directly links the debanking of crypto leaders to US government directives. .
Numerous crypto industry founders and executives have shared their own personal and corporate debanking stories in recent days, prompted by Andreessen Horowitz co-founder Marc Andreessen’s claim on Joe Rogan’s podcast last week that more than 30 Industry founders have lost access to banking during Joe Biden’s presidency.
Numerous crypto industry leaders, including Custodia Bank CEO Caitlin Long and Coinbase CEO Brian Armstrong, responded shortly after by sharing their own debanking experiences.
It is certainly plausible that those cases could be connected to the FDIC’s push to halt cryptocurrency-related activities at member banks, as revealed in Friday’s declassified letters. Excerpts from those letters released Friday don’t exactly make that connection, however, but Coinbase and other industry leaders seem persistent in continuing to search for that definitive proof.
Edited by Andrew Hayward
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
Disclaimer: Please note that the information provided on this page is for News purposes only and should not be considered investment or trading advice. ©Crypto.keynoteusa.com strongly recommends that you conduct independent research and/or consult with a qualified professional before making any investment decisions.
