A United States federal judge criticized the Federal Deposit Insurance Corporation (FDIC) for its redactions of crypto “pause letters” sent to banks, amid a Coinbase-backed Freedom of Information Act (FOIA) lawsuit.
“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 so-called “pause letters” — which in some cases have entire pages censored — show that 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.
“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.
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This “wasn’t just some crypto conspiracy theory,” Grewal posted on X on Dec. 6. “[The FDIC] is still hiding behind way overbroad redactions.”
Trump’s advisers are also considering overhauls of the Office of the Comptroller of the Currency and the Federal Reserve.
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