A U.S. banking regulator advised banks to pause direct involvement in crypto during 2022 and 2023 but did not mandate them to stop serving crypto companies, according to documents released on Friday.
A judge ordered the Federal Deposit Insurance Corporation (FDIC) to provide supervisory “pause letters” it sent to unidentified banks after Coinbase, through its research partner History Associates Incorporated, sued the agency for their release.
The FDIC first released the letters in December, but the judge requested revised versions with more detailed redactions.
The updated batch includes 25 letters, two of which were not part of the initial release.
The lawsuit is part of Coinbase’s broader campaign to highlight what it and other crypto companies allege is a systematic effort by U.S. banking regulators to isolate the crypto industry from the financial system.
Coinbase’s Chief Legal Officer, Paul Grewal, said on Friday that the newly revealed letters demonstrate a “coordinated effort to stop a wide variety of crypto activity” and urged Congress to investigate further.
In response, the FDIC also released a 2022 internal memo detailing how its supervisors assess bank proposals involving crypto activities.
The memo distinguishes between banks directly engaging in crypto, such as holding digital assets, and banks offering traditional services like lending to crypto companies.
The former requires heightened scrutiny.
FDIC Chairman Martin Gruenberg stated in December that the agency does not “debank” crypto firms but closely monitors direct crypto activities by banks, given their potential risks.
The memo highlights concerns about safety, soundness, consumer protection, and financial stability, noting these risks are “still evolving.”
This release comes as President-elect Donald Trump’s incoming administration prepares a broad crypto policy overhaul.
Reports suggest Trump could issue an executive order easing regulations on the sector as early as Jan. 20.