History Associates has joined Coinbase in a lawsuit against the United States Federal Deposit Insurance Corporation (FDIC) to compel them to comply with a Freedom of Information Act (FOIA) request and release the requested records.
According to a legal document filed on June 27, the suit is in response to the FDIC’s decision to withhold documents known as “pause letters,” which the agency’s inspector general allegedly sent to financial institutions instructing them to halt cryptocurrency-related activities.
Coinbase hired History Associates Incorporated to submit a FOIA request to the FDIC, which was denied. Hence, History Associates is now taking legal action to compel the FDIC to disclose the requested records.
The content of the suit
The complaint claims that the letters instructing financial firms to suspend digital asset activities are a tactical move by the FDIC and other financial regulators to strong-arm financial institutions into isolating digital asset businesses from the banking system.
History Associates states that this situation resembles a past initiative known as “Operation Choke Point.” Operation Choke Point was a controversial program where financial regulators pressured banks to terminate relationships with certain industries (e.g., payday lenders).
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However, the FOIA mandates that federal agencies release requested information unless it falls under specific exemptions. Agencies must also provide non-exempt portions of records even if parts of the records are exempt.
Despite this, the FDIC refused to release the “Pause Letters,” citing exemptions related to trade secrets and examination materials, without providing detailed justification.
The primary goal is to force the FDIC to release the Pause Letters and other related documents, which will reveal the extent and nature of the FDIC’s actions against the digital asset industry.
The History Associates suit also aims to hold the FDIC and other regulatory agencies accountable for their actions and ensure transparency in their regulatory practices.
Ongoing regulatory disputes
Coinbase is currently engaged in a separate legal battle with the U.S. Securities Exchange Commission (SEC), which has accused Coinbase of operating an illegal exchange that trades unregistered securities.
However, litigation analyst Elliott Stein indicated a minimal likelihood of failure for the cryptocurrency exchange against the SEC.
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