Coinbase Challenges U.S. Banking Regulators

In a recent letter to the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC), Coinbase emphasized the need for clear regulatory guidance. The exchange argues that state-chartered banks should be allowed to provide and outsource cryptocurrency services without unnecessary bureaucratic barriers, Bloomberg reports.

Coinbase is urging the OCC to revoke a prior interpretive letter, which its legal team claims imposes excessive restrictions that prevent traditional banks from entering the crypto market. The exchange is also seeking official confirmation from the Federal Reserve and FDIC that U.S.-registered banks can legally offer cryptocurrency custody and trading services.

Three major law firms—Arnold & Porter Kaye Scholer, Cleary Gottlieb Steen & Hamilton, and Wilmer Cutler Pickering Hale and Dorr—have backed Coinbase’s call for regulatory clarity. They argue that existing federal laws already permit banks to offer crypto services and collaborate with third-party providers like Coinbase and Kraken. The firms stress that regulators need to officially confirm banks' ability to work with external partners for crypto trading and custody services.

Paul Grewal, Coinbase’s Chief Legal Officer, has been a vocal critic of former SEC Chairman Gary Gensler, denouncing the agency’s “regulation by enforcement” approach. He contends that this strategy stifles innovation rather than protecting investors and has expressed support for the White House’s plans to restructure the SEC, advocating for a more balanced and transparent regulatory framework for digital assets.

The crypto community is hopeful that Donald Trump’s administration will bring a more favorable regulatory climate. Eric Trump has stated that his father intends to be “the most pro-crypto president”, proposing initiatives like a national Bitcoin reserve and appointing crypto-friendly officials to key regulatory positions. If enacted, these policies could reduce regulatory pressure, attract institutional investors, and accelerate the widespread adoption of digital assets.

Coinbase’s decisive efforts to establish regulatory clarity could accelerate the integration of crypto services into traditional finance. This shift would enhance accessibility and legitimacy for both institutional and retail investors, bringing the industry closer to mass adoption.

For more on Coinbase’s legal battles with the SEC and FDIC, read our article: “Coinbase Files Lawsuits Against SEC and FDIC”.