Coinbase has filed Freedom of Information Act (FOIA) requests to investigate the US regulators’ ongoing crackdown on cryptocurrency activities among banks.
Coinbase’s Legal Action for Crypto Regulations Clarity
Coinbase is pushing back against regulatory actions by filing two Freedom of Information Act (FOIA) requests. According to Paul Grewal, Coinbase’s chief legal officer, the requests aim to uncover how regulators are handling digital assets. The company seeks clarity on a reported cap on crypto-related deposits set by the Federal Deposit Insurance Corporation (FDIC).
We filed two new sets of FOIA requests in our continued effort to get any sort of clarity on how regulatory agencies are approaching digital assets
— Paul Grewal, Coinbase Chief Legal Officer
FDIC Regulatory Deposit Cap
The FDIC has allegedly instructed banks to limit deposits from cryptocurrency firms to 15% of their total deposits. Grewal mentioned this in an October 21 post on X. The first FOIA request targets documents related to this deposit cap and other regulations affecting financial institutions.
Past FOIA Requests and Lawsuits
The second FOIA request aims to explore how regulators have responded to previous crypto-related FOIAs. Grewal emphasized that these requests are distinct from earlier filings, which are currently part of federal lawsuits. Coinbase previously sued the SEC and FDIC for not complying with its earlier FOIA requests.
Regulatory Uncertainty
In 2023, Coinbase asked the SEC to clarify its classification of Ether. The agency has previously charged Coinbase for allegedly breaching securities laws concerning its ETH staking services. Although spot ETH is deemed a commodity by US regulators, the status of ETH staking pools remains ambiguous.
Pause Letters from the FDIC
Coinbase has also sought information about “pause letters” from the FDIC. These letters reportedly urged banks to slow their crypto-related activities. This legal push highlights Coinbase’s ongoing efforts to advocate for clearer regulations in the crypto space.
Advocacy for Crypto Regulation
Coinbase’s “Stand with Crypto” initiative is focused on promoting reasonable digital asset regulations. In March, the project established a political action committee (PAC) to support pro-crypto candidates. As the November presidential election approaches, the PAC’s efforts may impact the outcome.
The Presidential Landscape
The upcoming election features Republican nominee Donald Trump, who aims to establish America as the “crypto capital of the world.” In contrast, Democratic candidate Kamala Harris has maintained a more reserved stance on crypto. According to Galaxy Research, Harris is generally more favorable towards digital assets than President Biden, though she doesn’t advocate as strongly as Trump.
Navigating Regulatory Challenges
As Coinbase navigates this complex regulatory landscape, its FOIA requests reflect a broader demand for transparency. The company’s actions may influence the future of cryptocurrency regulation in the United States.
Charting the Future of Crypto
Coinbase’s commitment to legal action and advocacy signals its intent to shape the regulatory framework for digital assets in the US.
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