Coinbase resolves FOIA fight as FDIC pays fees after ruling

FDIC to pay fees, end FOIA fight over crypto pause letters

The Federal Deposit Insurance Corporation has reportedly agreed to pay Coinbase $188,440 in legal fees and to end its Freedom of Information Act dispute over the release of so‑called crypto “pause letters,” as reported by Decrypt following a court ruling that found the agency violated federal disclosure requirements. The litigation, overseen by U.S. District Judge Ana C. Reyes in Washington, D.C., centered on redactions and the adequacy of the agency’s document searches.

According to that reporting, the resolution includes an overhaul of FOIA practices at the agency alongside the fee payment, effectively closing a closely watched transparency case. Coinbase was the requester seeking access to supervisory correspondence that had influenced banks’ approaches to digital‑asset activities.

What FDIC crypto pause letters are and why banks cared

The crypto “pause letters” were supervisory communications signaling that banks should pause, or not expand, planned or ongoing crypto and blockchain initiatives pending further risk assessment and compliance review. For institutions, such messages can delay product launches, reallocate compliance resources, and foreshadow examiner expectations.

The policy debate turned on whether these letters were measured risk reminders or de facto prohibitions on otherwise permissible activities, and how much of the underlying rationale should be public under FOIA. Critics also pressed for clarity on the scope of the agency’s searches and the breadth of its redactions before the court.

“FDIC’s overly narrow interpretation of the FOIA request is ‘barely laughable,’” said U.S. District Judge Ana C. Reyes during a February 2025 hearing, as reported by The Block, reflecting judicial skepticism about the agency’s redactions and search methodology.

Immediate impact on FOIA policy, supervision, and bank crypto activity

In the near term, the reported agreement points to tighter FOIA disciplines around line‑by‑line justifications for redactions, fuller search protocols across systems, and narrower use of exemptions. That approach aligns with the court’s scrutiny of earlier productions and could reduce future litigation risk.

According to the FDIC, subsequent supervisory updates in March–April 2025 rescinded FIL‑16‑2022 and issued new guidance (including FIL‑7‑2025), clarifying that FDIC‑supervised institutions may engage in permissible crypto‑related activities, provided they maintain robust risk management and comply with applicable laws. That shift reframes prior expectations by emphasizing governance, third‑party risk, and consumer protection rather than blanket pauses.

For banks, a FOIA reset combined with clarified supervisory expectations may lower procedural friction, but it does not eliminate heightened risk standards. Institutions will likely proceed incrementally, calibrating control frameworks as examiners continue to prioritize safety and soundness in crypto‑adjacent services.

At the time of this writing, Coinbase shares were around $165.86 in after‑hours trading, based on data from NasdaqGS delayed quotes; this market information is provided for context only.

Timeline: FOIA request, redactions dispute, and reported resolution

Coinbase sought access to the FDIC’s crypto‑related supervisory correspondence through FOIA, leading to production of a set of “pause letters” and subsequent public release activity in early February 2025 covering two dozen‑plus institutions. The breadth of redactions and the scope of the agency’s searches quickly became the core of the dispute.

As reported by Cointelegraph, Judge Ana C. Reyes later ordered the agency to amend its redactions and justify them more specifically, while pressing for confirmation of comprehensive records searches. Separately, according to the U.S. House Committee on Oversight and Accountability, lawmakers pursued unredacted materials amid questions about whether supervisory actions were appropriately grounded.

The case was then reported as resolved with the agency agreeing to pay fees and revamp FOIA policies, bringing the fight over the crypto pause letters to a close in federal court. That outcome, as initially reported by Decrypt, ties together judicial direction on transparency with a prospective policy reset on both disclosure and supervision.