Coinbase is going on the offensive after the SEC and FDIC denied information requests filed under the Freedom of Information Act.
Crypto exchange Coinbase, through consultancy firm History Associates Inc, has sued the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) in a U.S. District of Colombia court for unfairly rejecting Freedom of Information Act (FOIA) solicitations.
The complaint accused the agencies of stonewalling crypto-related policy clarity and violating FOIA obligations. FOIA requests typically allow public access to records held by U.S. watchdogs.
Coinbase employed History Associates in 2023 to petition for the release of documents related to the SEC’s approach to Ethereum and the classification of its native crypto, Ether (ETH). The firm also asked to review investigative information surrounding cease-and-desist orders issued to Enigma MPC and Etherdelta founder Zachary Coburn.
After an FDIC report last October revealed a directive for financial institutions to pause all operations related to crypto-assets, Coinbase petitioned the corporation to send copies of the letters.
Respective requests sent to the SEC and FDIC for details were denied several times, prompting America’s largest crypto exchange to attempt retrieval through court proceedings. According to Coinbase, both agencies, particularly the SEC, have engaged in a deliberate and concerted effort to pursue cryptocurrency inclusion from the U.S. financial system.
“The SEC’s rationale for withholding documents from investigations that concluded in settlements years ago is tailor-made to frustrate the legitimate purposes for which Coinbase sought the Coburn and Enigma MPC documents in the first place—to understand the view of the law that underlies the SEC’s enforcement blitzkrieg against the digital asset industry.”, an excerpt from the lawsuit read.
Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry. @SECGov has claimed sweeping authority, but refuses to provide any rules, let alone consistent or coherent ones. While @FDICgov pressured financial institutions to cut…
— paulgrewal.eth (@iampaulgrewal) June 27, 2024
Coinbase vs. SEC intensifies
The complaints add to a long list of accusations against the SEC regarding what Coinbase and other crypto industry participants describe as a “regulation by enforcement” approach. SEC chair Gary Gensler has regularly fired back at the nascent digital asset landscape, scrutinizing the industry for rampant fraud practices and widespread non-compliance.
America’s biggest crypto exchange is now engaged with the SEC on three fronts in a quest for regulatory clarity. Last June, SEC attorneys sued the company for supposedly facilitating unregistered securities trading and operating an illegal securities exchange.
Additionally, the platform filed a rule-making petition in 2022 that has advanced to the U.S. Court of Appeals for the Third Circuit.