On February 6, 2026, Eastern Standard Time, the Federal Deposit Insurance Corporation (FDIC) announced a settlement with History Associates, a historical research organization commissioned by Coinbase, regarding a lawsuit surrounding the Freedom of Information Act (FOIA). This case, which lasted several years, originated from a request by History Associates to disclose the "cease and desist" documents issued by the FDIC to banks. The case concluded with the FDIC agreeing to pay $188,440 in attorney fees and disclose some documents. The regulatory agency abandoned its blanket confidentiality stance on the cease and desist letters, signaling a key shift towards regulatory transparency being forcibly "lit up" by the judiciary. The struggle over these documents essentially redraws the boundaries of regulatory transparency and directly confronts the industry's long-standing accusations of "debanking crypto through banking channels." The question remains: to what extent can this judicial victory, which is not a large sum on paper, rewrite the power structure and dynamics between the crypto industry and the banking system?
Years of Tug-of-War Conclude: A Systemic Shift for $188,440
● The source of the lawsuit can be traced back to Coinbase's long-standing dissatisfaction with regulatory "shadow tools." Coinbase commissioned History Associates to request the disclosure of regulatory correspondence related to crypto under FOIA, particularly the "cease and desist" letters directed at banks. After the regulatory agency broadly rejected the request citing exemption clauses, History Associates filed a lawsuit, accusing the FDIC of abusing exemptions and obstructing public understanding of how regulation affects the relationship between banks and crypto companies. This legal battle evolved from an initial information request into a systematic challenge to the confidentiality practices of regulatory agencies.
● The latest settlement terms show that the FDIC agreed to pay History Associates $188,440 in attorney fees and withdrew its previous blanket confidentiality stance on the cease and desist letters. More importantly, the FDIC committed in the settlement to adjust and improve its FOIA implementation practices, shifting from a past tendency to broadly reject requests on the grounds of "regulatory sensitivity" to a more nuanced, case-by-case review standard. On the surface, this is merely a payment of litigation costs, but in essence, it acknowledges the problems with existing confidentiality practices and opens the door for more information disclosure requests in the future.
● Narratively, both parties seized the opportunity to shape their respective victory stories. Coinbase's Chief Legal Officer Paul Grewal emphasized that "the years-long lawsuit proves the existence of coordinated actions to marginalize the crypto industry," positioning this settlement as a judicial exposure of "debanking" operations. Meanwhile, Coinbase's Vice President of Legal RVanGrack highlighted the FDIC's commitment to "improving FOIA practices to avoid similar issues in the future," attempting to frame this as a turning point towards procedural justice in the regulatory system. The FDIC maintained restraint, presenting the payment of fees and policy adjustments as compliance optimization rather than an admission of a conspiracy to "suppress crypto."
● In terms of amount, over $180,000 is merely a "small sum" for a federal regulatory agency, but at the institutional level, this represents a heavyweight victory. It has, for the first time in practical operations, pried open the overall exemption practice for bank regulatory documents, laying a replicable legal foundation for future disclosures regarding cease and desist letters, inspection reports, and other sensitive documents. This outcome, characterized as "not a large financial cost but significant institutional implications," makes this case likely to become a key reference point for future regulatory reshaping and industry counterattacks.
Exposed Cease and Desist Letters: Regulatory Darkness Becomes Visible
● The so-called "cease and desist letters" are essentially informal warnings or advisories issued by regulatory agencies to banks, asking them to "cease" business dealings with certain high-risk clients, communicated through informal letters rather than formal rules or sanctions. In the context of crypto, these letters are widely believed to guide banks away from crypto-related businesses such as exchanges and custodians, thus being viewed by the industry as a form of "undocumented policy tool"—without public hearings or clear accountability, yet having substantial impacts on funding channels.
● Based on currently limited public information, 23 cease and desist letters have been included in the disclosure scope (from a single source), and a related report previously released by Congress indicated that these letters and similar practices could affect over 30 crypto-related entities. Although we lack a complete list of banks and business details, this magnitude itself is sufficient to indicate that cease and desist letters are not isolated incidents but rather a replicable operational model that can spread within the system. For the industry, this means that the risks of banking cooperation are not solely driven by "market judgment" but are heavily influenced by invisible regulatory signals.
● Within the framework of the "Operation Choke Point 2.0" controversy, cease and desist letters are viewed by many industry participants as a key piece of evidence in the "debanking" accusations. "OCP2.0" refers to the allegation that regulatory agencies systematically restrict banks from providing services to specific industries—primarily crypto companies in this round—through informal pressure, verbal hints, and internal communications. The Congressional report named over 30 affected entities, further deepening market suspicions that such informal tools are used as a means of "selective squeezing," thus bringing these "invisible letters" to the center of political and public opinion battles.
● However, when analyzing these cease and desist letters, it is essential to maintain clear risk boundaries. On one hand, we can confirm the existence of these letters and their binding effect on bank behavior; on the other hand, the brief does not provide any verifiable specific wording, tone, or internal decision-making motives of the FDIC. Recklessly speculating on the "threat level between the lines" or "subjective malice" not only exceeds the factual basis but also misleads the industry’s judgment on regulatory trends. Therefore, more importantly, the focus should be on how this informal tool itself undermines market trust in regulatory fairness and what ambiguous and insurmountable thresholds it sets for compliant participants.
Judicial Counterattack and Congressional Pressure: Regulation No Longer Operates Solely in the Shadows
● The tug-of-war surrounding "OCP2.0" has seen tensions between the industry, Congress, and regulatory agencies persist for years. On one side are exchanges, custodians, and infrastructure companies, accusing coordinated actions of gradually excluding them from the formal banking system; on the other side are regulatory agencies, emphasizing their responsibility to maintain financial stability and prevent emerging risks. The over 30 affected entities mentioned in the Congressional report hold symbolic significance politically—it conveys to the public that this is not merely an issue of individual banks being "overly cautious," but potentially a structural result of regulatory attitudes "sinking" through informal channels.
● From a legal technical perspective, the milestone of this case lies in the court's first clear rejection of the blanket exemption logic for bank regulatory documents. In the past, regulatory agencies often excluded documents related to bank supervision from FOIA altogether, citing "review privilege" and "regulatory secrecy." The judicial stance behind this settlement requires regulators to conduct "case-by-case reviews" of each document to determine whether it is truly necessary to keep it entirely or partially confidential. This FOIA implementation standard breaks the convention of using "regulatory sensitivity" as a universal shield, providing a means for civil institutions and media to initiate more precise information disclosure lawsuits.
● The judicial victory's pressure effect on regulatory practices is first reflected in the FDIC's own commitment to "improve FOIA practices." Although specific timelines and internal adjustment details have not been disclosed, this commitment itself creates demonstrative pressure on other federal financial regulatory agencies: in the future, continuing to use the blunt approach of "blanket rejection" in response to similar FOIA requests will face higher costs of losing lawsuits and settlements. In this sense, this case not only delineates a new boundary within the FDIC system but also sends a signal to the entire Washington regulatory community to "recalibrate the information disclosure valve."
● For the crypto industry, this precedent also provides a replicable "playbook." In the future, whether targeting more cease and desist letters, internal guidelines, or inspection reports and risk assessment memoranda, industry organizations, think tanks, and even individual companies can draw on this case's path: using FOIA as an entry point, gradually prying open the archives through litigation and settlement, and then using the obtained information for subsequent infringement lawsuits, Congressional investigations, and public opinion battles. Regulatory agencies will no longer be "black boxes that only produce results without showing the process," but will be compelled to provide publicly defensible reasons for every instance of "email pressure" in court and hearings.
New Calculations for Banks and Crypto Companies: From Gauging Trends to Reading Precedents
● As some cease and desist letters are made public and FOIA standards trend towards case-by-case reviews, the environment in which commercial banks assess cooperation with crypto companies is subtly but critically changing. In the past, many compliance and risk departments relied on "trend gauging"—interpreting from regulatory speeches and private communications whether "now is the time to avoid crypto." With increased transparency, banks are expected to calibrate their risk assessments more based on public texts, court rulings, and disclosed regulatory correspondence: identifying which businesses indeed pose risk management concerns and which are merely politically sensitive but not necessarily illegal, thereby reducing the impulse to "over-de-risk" out of fear of uncertainty.
● For crypto companies, this change will also reflect in their compliance and banking relationship management strategies. The increased feasibility of obtaining regulatory correspondence allows companies to more accurately align their product structures, customer due diligence, and anti-money laundering processes with regulatory concerns, rather than being passively beaten in an information asymmetry. Additionally, through FOIA requests and subsequent legal actions, companies can systematically document and challenge "unwritten rules," transforming pressures that were previously scattered across phone calls and private messages into formal documents that can be scrutinized and questioned, which will become new bargaining chips in negotiations with banks and when explaining risks to boards.
● In the short term, there may also be a subtle "self-censorship" effect on the regulatory side. On one hand, the boundaries for using informal tools like cease and desist letters will inevitably tighten—each letter must anticipate "when it might appear in court or the media." On the other hand, to compensate for the insecurity of a "narrowed toolbox," regulatory agencies are likely to become stricter and more detailed in formal rule-making, inspection frequency, and written compliance requirements. The industry will feel a shift from "covert pressure" to "clear rules and high standards," where the pressure may not necessarily lessen, but the rules of engagement will become clearer and more visible.
● Therefore, this round of cognitive reassessment based on cease and desist letters will not immediately trigger a "mass return" of banks to the crypto space. The memories of capital and compliance departments are conservative, and Congressional debates and regulatory signals are still in tension. However, it can be expected that the narrative of "comprehensive debanking" will gradually weaken as facts are disclosed and cases are adjudicated. In the coming years, the market is more likely to see individual banks willing to delve into the rules and engage in rational dialogue with regulators, leading the way in restoring or expanding cooperation with crypto companies within compliance frameworks, rather than a collective "unblocking" overnight.
From Shadows to Archives: The Next Act in Crypto Regulation
● In summary, this case leaves a profound imprint on three levels: first, in terms of regulatory transparency, it breaks the convention of blanket exemptions for bank regulatory documents, opening a systemic window for the public to understand how regulation shapes the bank-crypto relationship; second, in terms of FOIA implementation standards, it establishes an operational logic of "case-by-case review" rather than "blanket exemption," forcing regulatory agencies to provide more specific legal justifications for each refusal to disclose; third, regarding the legitimacy boundaries of informal tools like cease and desist letters, it sends a clear signal—that such "shadow documents" can no longer hide indefinitely in sealed filing cabinets.
● For the crypto industry, what is more worth remembering is not the outcome of this particular case itself, but the value of litigation and information disclosure as long-term strategic tools. By using FOIA and judicial processes to drag "shadow regulation" into a scrutinizable institutional stage, it can weaken the distorting effects of opacity on the behaviors of banks and companies, while also accumulating a factual basis for subsequent policy advocacy and legislative revisions. This is a tug-of-war that will not end with a single case, but rather a systemic battle that the industry must invest resources in over the long term, accumulating precedents and discourse power.
● Looking ahead, foreseeable chain reactions include: more FOIA requests being initiated regarding cease and desist letters, internal memoranda, and regulatory guidance; a new round of lawsuits arising when the scope of disclosures is further restricted; and Congress potentially leveraging existing precedents to further question regulatory agencies on how they use informal tools in subsequent hearings and investigations. These actions collectively drive a transition from the gray area of "email pressure and verbal hints" to a framework of "managing emerging risks through explicit rules and open procedures."
● It is important to note that this settlement does not indicate a shift in regulatory stance towards being "pro-crypto." The real change lies in the power dynamics between the crypto industry and regulators: moving from a one-sided passive acceptance of opaque constraints to competing for interpretive authority and institutional space in a more open and negotiable environment. Regulation will remain strict, and in some aspects may even become more stringent, but it must increasingly operate in the light of day. For crypto participants seeking to survive long-term within the U.S. financial system, this presents both a challenge and a rare structural opportunity.
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