The Federal Deposit Insurance Corporation agreed to pay $188,440 in legal fees and revise its transparency policies to settle a FOIA lawsuit tied to crypto-related “pause letters.”
The settlement ends a multi-year dispute linked to Coinbase’s claims of “Operation Choke Point 2.0,” after a court found the regulator violated federal disclosure law by withholding records.
“The years of litigation were worth it,”
Said Paul Grewal, adding that the case uncovered “dozens of crypto ‘pause letters’—indisputable proof” of coordinated efforts to sideline the industry.
The letters, sent by the FDIC to banks, asked them to pause or limit crypto-related activities and were revealed after the agency’s inspector general criticised the practice in a 2023 report.
Under the settlement, the FDIC pledged it would no longer categorically withhold bank supervisory documents and would instead review FOIA requests on a document-by-document basis.
Joe Ciccolo, founder of BitAML, said the case showed crypto oversight had been shaped by political and reputational concerns rather than transparent, risk-based supervision.
The parties will formally dismiss the case once the FDIC remits payment, with the regulator declining immediate comment on the agreement.