The Federal Deposit Insurance Corporation (FDIC) agreed to pay $188,440 in legal fees and is abandoning efforts to withhold so-called crypto “pause letters,” ending a lawsuit under the Freedom of Information Act (FOIA) that forced the disclosure of documents about communications between banks and regulators.
The lawsuit was filed in June 2024 by History Associates Incorporated on behalf of Coinbase, challenging the FDIC’s blanket refusal to release banking oversight documents under the Freedom of Information Act (FOIA). The claim alleged that the agency had automatically applied broad exemptions without reviewing the documents individually.
The case progressed until, around November 2025, a federal court determined that the FDIC had violated the FOIA. According to the ruling, the agency improperly invoked categorical exemptions and failed to conduct the document-by-document review required by law. Furthermore, the court criticized the FDIC’s written submissions, noting the lack of a good-faith effort to justify the withholdings.
As a result of the litigation, the FDIC accepted a settlement that included paying $188,440 in legal fees to Coinbase. The FDIC also committed to reviewing and modifying its FOIA procedures, incorporating new training guidelines that instruct staff to interpret requests more broadly and to end any general policy of withholding supervisory documents under Exemption 8.
What the documents reveal and the industry’s reaction
The documents include so-called “pause letters,” communications that allegedly instructed banks to halt or limit activities related to crypto assets. These materials fueled the narrative of coordinated pressure from banking regulators to restrict the crypto sector’s access to the traditional financial system.
Paul Grewal, general counsel at Coinbase, stated that years of litigation were worthwhile, arguing that the documents reveal dozens of letters that demonstrate coordinated regulatory pressure. Similarly, Joe Ciccolo, founder of BitAML, questioned the FDIC’s previous approach, calling it driven by political and reputational considerations rather than a transparent, risk-based supervisory framework.
For banks, corporate treasuries, and market participants, the agreement reduces a significant source of regulatory uncertainty. The FDIC’s commitment to review its FOIA practices and treat requests on their merits improves public transparency regarding supervisory communications and could make it easier for entities to assess compliance and reputational risks when considering ties to the crypto sector.
