Coinbase Urges U.S. Agencies to Clarify Crypto Banking Status
1min read Coinbase, a leading cryptocurrency exchange, has called on U.S. regulatory agencies to remove regulatory roadblocks for crypto banking. In a letter sent to the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC), Coinbase urged these agencies to provide clarity on the banking status for the crypto industry.
Serving the crypto industry has long been a contentious issue for U.S. banks. While federal law already authorizes banks to provide crypto services and partner with third-party providers like Coinbase, some banks have been hesitant to engage in these activities due to regulatory uncertainty. In June 2024, Coinbase filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) and the FDIC, accusing these agencies of attempting to "quarantine crypto asset companies from basic banking services."
Coinbase's Chief Policy Officer, Faryar Shirzad, stated that regulators must clearly state that banks can collaborate with third-party providers to offer crypto transaction services to customers. The exchange is seeking formal confirmation from the Fed and FDIC that state-chartered banks under their supervision can provide and outsource crypto custody and trading execution services.
Coinbase's push for regulatory clarity comes as the House Oversight Committee investigates Operation Choke Point 2.0, examining alleged regulatory actions limiting banking access for crypto firms. The FDIC and other regulatory bodies have reportedly applied informal pressure on banks to limit services to industries considered risky, including digital assets. Coinbase has uncovered multiple instances where the FDIC discouraged banks from providing crypto banking services, including internal documents that showed the agency asked banks to "pause" crypto-related activity.
Coinbase's legal chief Paul Grewal and CEO of MARA Holdings Fred Thiel are scheduled to testify before the Subcommittee on Oversight and Investigations of the U.S. House Financial Services Committee on Thursday regarding the alleged systematic debanking of crypto firms under the Biden administration.
