A United States federal judge has expressed disapproval of the Federal Deposit Insurance Corporation’s (FDIC) handling of redactions in correspondence related to cryptocurrency activities. This scrutiny comes in the context of a Freedom of Information Act (FOIA) lawsuit backed by Coinbase, with the presiding judge, Ana Reyes, highlighting concerns over the FDIC’s approach towards the content that was censored in its communications with banks.
Judge Reyes emphasized the need for the FDIC to implement more thoughtful redaction practices, indicating that blanket redactions of non-essential content, such as conjunctions and prepositions, were inappropriate. She set a deadline for the FDIC to submit revised letters by January 3 and insisted that the agency be ready to justify each redaction made.
The “pause letters” in question, which were partially released earlier in December, contained significant censorship, with entire sections obscured. In these communications, the FDIC reached out to 23 financial institutions regarding their involvement in cryptocurrency and instructed some to halt all related activities or refrain from expanding their crypto services.
Coinbase’s legal executive has raised questions about the FDIC’s motives, suggesting that the redacted information might indicate an attempt to restrict the crypto industry from accessing necessary financial services. This claim aligns with speculations circulating within the crypto sector about a perceived government initiative, informally named “Operation Chokepoint 2.0,” aimed at limiting financial support for cryptocurrency businesses. The legal expert argued that the situation goes beyond mere conspiracy theories, highlighting the FDIC’s continued overreach in obscuring information from public scrutiny.
