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A US federal judge has ordered the FDIC to redo and resubmit redactions it made to crypto “pause letters” it sent to financial institutions.
A United States federal judge has criticized the Federal Deposit Insurance Corporation (FDIC) for its redactions of crypto “pause” letters to banks in a Coinbase-backed Freedom of Information Act (FOIA) suit.
“The Court is concerned with what appears to be FDICs lack of good-faith effort in making nuanced redactions,” Washington, DC, district court judge Ana Reyes wrote in a Dec. 12 text order.
“Defendant cannot simply blanket redact everything that is not an article or preposition.”Judge Reyes ordered the FDIC to “make more thoughtful redactions” and re-file letters by Jan. 3, adding the FDIC “should be prepared to defend each new redaction.”
The full text of Judge Reyes’ Dec. 12 order. Source: PACER
The so-called “pause letters” shared earlier in December — which in some cases have entire pages censored — show the FDIC asked 23 financial institutions about their crypto-related activities.
In some of the letters, the FDIC told the firms to “pause all crypto asset-related activity” or otherwise “refrain from providing” or “expanding” seemingly crypto-related products and services.
An excerpt of the FDIC’s filing shows an essentially completely redacted page of a letter sent to an unknown financial firm. Source: CourtListener
“What is [the FDIC] working so hard to hide?” Coinbase legal chief Paul Grewal wrote in a Dec. 12 X post in response to Judge Reyes’ order.
Related: Crypto founders share debanking stories during ‘Operation Chokepoint 2.0’
Earlier this month, Grewal said the letters gave credence to a long-shared crypto industry rumor that the Biden administration was trying to cut the crypto industry off from financial services — dubbed “Operation Chokepoint 2.0.”
“[It] wasn’t just some crypto conspiracy theory,” Grewal wrote to X on Dec. 6. “[The FDIC] is still hiding behind way overbroad redactions.”
The same day, The Wall Street Journal reported that Donald Trump’s presidential transition team is asking potential banking regulator picks if, as president, he could nix or combine such agencies — including the FDIC.
Trump’s advisers are also probing overhauls of the Office of the Comptroller of the Currency and the Federal Reserve.
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