Coinbase (NASDAQ:COIN), a major cryptocurrency exchange, sought intervention from US regulators to affirm that banks can freely offer services to crypto businesses. The exchange sent letters to the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC) on February 4, urging them to clarify the status of banking services for the cryptocurrency sector.
Coinbase's communication specifically requested the OCC to retract an interpretive letter that allegedly creates an unofficial application process for new banking activities, thus hindering banks from participating in the crypto asset market. Additionally, Coinbase appealed to the Federal Reserve and FDIC to acknowledge that state-chartered banks have the authority to provide and outsource services related to crypto custody and execution.
The exchange's push for regulatory clarity is backed by three law firms—Arnold and Porter Kaye Scholer, Cleary Gottlieb Steen and Hamilton, and Wilmer Cutler Pickering Hale and Dorr—which, according to Bloomberg, have sent separate letters stating that existing federal laws already permit banks to engage in crypto services and collaborate with third-party providers like Coinbase.
Faryar Shirzad, Coinbase's chief policy officer, emphasized the importance of regulators confirming that banks can partner with third-party entities to offer trading and exchange services to their customers.
The involvement of US banks in the crypto industry has been a topic of debate. While some, like BNY Mellon (NYSE:BK), have initiated plans for crypto custody services, there have been reports of the FDIC asking several banks to halt their crypto-related operations.
In June 2024, Coinbase initiated legal action against the US Securities and Exchange Commission and the FDIC, accusing them of a coordinated effort to block digital-asset firms from accessing vital banking services. This ongoing legal dispute saw Coinbase's chief legal officer, Paul Grewal, restate these allegations in January 2025, claiming that the FDIC intentionally left out certain "pause letters" concerning crypto in a Freedom of Information Act lawsuit.
With the inauguration of US President Donald Trump on January 20, the crypto community is now anticipating potential policy changes that could favor the industry. Coinbase, which has been fostering closer relations with the Trump administration, viewed the president's election as a favorable development for cryptocurrency and economic freedom.
Coinbase's initiative to reinforce banking support for crypto custody and execution is significant, as the exchange provides custody services for numerous US Bitcoin exchange-traded funds, which began trading last year.
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