History Associates has joined Coinbase in a lawsuit against the Federal Deposit Insurance Corporation (FDIC) to enforce compliance with a Freedom of Information Act (FOIA) request and release the requested records.
According to a legal filing on June 27, the lawsuit challenges the FDIC’s decision to withhold documents referred to as “pause letters,” purportedly sent by the agency’s inspector general to financial institutions, directing them to cease cryptocurrency-related activities.
Coinbase engaged History Associates Incorporated to submit the FOIA request to the FDIC, which was denied. Consequently, History Associates is now pursuing legal action to compel the FDIC to disclose the requested records.
The lawsuit’s content
The complaint alleges that the letters directing financial firms to halt digital asset activities are a strategic maneuver by the FDIC and other regulators to coerce financial institutions into segregating digital asset businesses from the banking system.
History Associates compares this scenario to a previous initiative called “Operation Choke Point.” Operation Choke Point was a contentious program in which financial regulators pressured banks to terminate relationships with specific industries, such as payday lenders.
However, according to the FOIA, federal agencies are required to disclose requested information unless it qualifies for specific exemptions. Agencies must also release non-exempt portions of records, even if some parts of the records are exempted.
The main objective is to compel the FDIC to disclose the Pause Letters and other associated documents, shedding light on the FDIC’s actions against the digital asset industry.
The History Associates lawsuit also seeks to hold the FDIC and other regulatory agencies accountable for their actions and promote transparency in their regulatory practices.
Ongoing regulatory controversies
Coinbase is currently embroiled in a distinct legal dispute with the U.S. Securities and Exchange Commission (SEC), which alleges that Coinbase operates an illegal exchange trading unregistered securities.
However, litigation analyst Elliott Stein suggests there is a low probability of Coinbase losing the case against the SEC.
