Coinbase Files Lawsuits Against SEC, FDIC Over FOIA Request
Coinbase has filed lawsuits against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) after the crypto exchange failed to obtain requested records from the government agencies under the Freedom of Information Act (FOIA), Thursday court documents show.
Coinbase Files Lawsuits Against SEC, FDIC Alleging Document Obstruction
Official documents list History Associates, a records management company hired by Coinbase in 2023 last year, as the plaintiff.
Under the crypto exchange’s direction, History Associates used the FOIA to attempt to obtain federal records relating to the SEC’s classification of Ethereum (ETH) in July 2023.
By October, the SEC denied this request, claiming the federal regulator “could not locate or identify” the documents in question.
While History Associates went on to appeal the decision in January 2024, the SEC once again blocked the firm’s query, stating that the records were “protected.”
The complaint further noted that the hired company sought “pause letters” from the FDIC to banks operating crypto services to suspend all digital asset activities.
“The SEC’s new, opaque, and shifting view of the securities laws deprives regulated parties of the fair notice demanded by due process, leaving them to guess whether the SEC might view their activities as securities transactions and decide to subject them to investigation, prosecution, and backward-looking penalties,” the complaint read. “This uncertainty is forcing entrepreneurs to move their digital-asset businesses abroad.”
Coinbase’s Long History Of Crypto Regulation Pushback
The SEC and Coinbase have a contentious history and are currently embroiled in two other high-profile cases with one another.
Coinbase sued the Gary Gensler-led agency in 2022 in hopes of getting the SEC to establish a clear regulatory framework for the blockchain sector.
The following year, the SEC filed its own lawsuit against the crypto exchange for reportedly violating U.S. securities law. Both cases are currently active in the legal system.
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
Meanwhile, Coinbase’s Chief Legal Officer Paul Grewal took to X Thursday morning to criticize the SEC’s “unlawful” regulation-by-enforcement approach to cryptocurrencies.
“Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry,” Grewal stated. “@SECGov has claimed sweeping authority, but refuses to provide any rules, let alone consistent or coherent ones. While @FDICgov pressured financial institutions to cut off the industry from the banking system.”
At the time of publication, the SEC has yet to respond to the litigation publicly.
