On October 18, Coinbase submitted two new Freedom of Information Act (FOIA) requests aimed at clarifying the regulatory environment for cryptocurrencies in the United States.
The requests, submitted through History Associates Incorporated, were directed at the Federal Deposit Insurance Corporation (FDIC).
Clarification on Deposit Caps
Paul Grewal, Coinbase’s Chief Legal Officer, indicated that one of the requests focuses on understanding a 15% deposit limit allegedly imposed on banking institutions serving digital asset firms. This cap reportedly affects several banks, including Signature Bank, Customers Bank, Cross River Bank, Western Alliance Bank, and Silvergate Bank.
The request outlines a need for documentation related to discussions between FDIC officials, representatives from various banks, and members of the Federal Reserve and Treasury’s Office of the Comptroller of the Currency (OCC) dating back to June 1, 2022.
If the FDIC decides to use any FOIA exemptions to withhold information, Coinbase has requested a comprehensive justification for such actions.
Insight into Regulatory Agency Practices
The second request aims to gain insight into how the FDIC and OCC have processed FOIA requests. Specifically, Coinbase seeks comprehensive logs of FOIA submissions from January 1, 2022, to October 1, 2023.
By requesting these logs in a text-searchable format, Coinbase emphasizes its commitment to transparency and easy access to information.
This initiative is part of Coinbase’s broader strategy to analyze regulatory agencies’ responsiveness regarding digital asset regulations, potentially highlighting how information is handled by financial authorities.
Caitlyn Long, CEO of Custodia Bank, has commented that the perceived “lawless” behavior of federal banking regulators towards banks with cryptocurrency clients will continue to come to light.
Previous FOIA Efforts and Ongoing Litigation
Grewal noted that these most recent requests are distinct from those submitted to the SEC in July 2023. The earlier petitions sought clarity on the SEC’s enforcement actions against cryptocurrency firms and its criteria for labeling certain digital assets as securities.
Additionally, on the same day as the FOIA submissions, Coinbase filed a motion for partial summary judgment against the SEC, insisting on the release of internal documents that clarify the agency’s enforcement approach toward the crypto sector.
Such actions are prompted by the SEC’s prolonged delays in sharing documents initially withheld under FOIA regulations. Coinbase argues the SEC’s delays lack justification, striving for clarification on how securities laws are applied to cryptocurrencies, signaling a broader challenge to the regulatory body’s methods.
