Judge Blasts FDIC Over Censorship of Crypto-Related Letters to Banks
Judge criticizes FDIC's censorship of crypto-related letters, ordering clearer redactions in Coinbase lawsuit.
Highlights:
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Judge criticizes FDIC for overbroad redactions of crypto-related pause letters sent to banks.
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FDIC must revise redactions and refile letters by January 3, 2024.
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Coinbase's legal team questions FDIC's actions, suggesting a broader anti-crypto policy.

A U.S. federal judge recently criticized the FDIC for heavily censoring letters sent to banks about cryptocurrency activities. The case stems from a Coinbase-backed Freedom of Information Act (FOIA) lawsuit.
FDIC Redactions and Judgeâs Criticism
On December 12, Judge Ana Reyes expressed concern over the FDICâs wide-reaching redactions in the âpause letters.â The judge highlighted the lack of thoughtful and fair redactions, calling them overly broad. She said that the Court is concerned with what appears to be FDIC's lack of good-faith effort in making nuanced redactions.
The letters were sent to 23 financial institutions. The FDIC instructed banks to halt or limit certain crypto-related activities. In many cases, entire pages were blacked out, making the letters less transparent. The judge ordered the FDIC to carefully review and re-file the documents by January 3, 2024.
Coinbase Legal Chief Speaks Out
Paul Grewal, Coinbaseâs legal chief, sharply criticized the FDICâs actions. He questioned why the agency was so determined to hide these letters. On December 12, Grewal posted on X (formerly Twitter), âWhat is the FDIC working so hard to hide?â
Grewalâs comments reflect growing concern within the crypto industry. Many believe the Biden administration is trying to restrict the sectorâs access to banking services. The rumored "Operation Chokepoint 2.0" policy appears to be a covert attempt to stifle crypto.
Earlier, Grewal argued that the redactions confirmed long-standing suspicions about the governmentâs approach to crypto. As the lawsuit moves forward, the pressure on the FDIC to explain these redactions continues to rise.
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