Coinbase Uncovers FDIC Advising Banks to Halt Crypto Services

Coinbase recently uncovered evidence that the Federal Deposit Insurance Corporation (FDIC) is advising US banks not to offer cryptocurrency-related services.

According to Paul Grewal, Coinbase’s chief legal officer, more than 20 cases have been identified in which the FDIC has explicitly told banks to “stop” or “refrain” from engaging in crypto banking.

This discovery follows Coinbase’s Freedom of Information Act (FOIA) requests aimed at increasing transparency regarding the stance of US banking regulators on cryptocurrencies.

In a Nov. 1 post, Grewal argued that these findings reveal an agency that is operating behind a “bureaucratic curtain” to restrict financial access to legitimate crypto businesses.

Among the 23 documented cases, one particularly detailed document – called “Document 5” – describes an FDIC meeting in which a bank’s crypto services were scrutinized. The bank provided additional documentation, but the FDIC advised it to stop expanding crypto services until a full review was conducted.

Coinbase continues to advocate for transparency and regulatory fairness as it prepares to work with whichever administration takes office after the upcoming US presidential election.

The revelations reflect ongoing tensions between crypto companies and regulators, highlighting the need for clarity in the evolving financial landscape.