Publicly traded crypto exchange Coinbase, through an intermediary, has filed two civil lawsuits against the United States Securities and Exchange Commission and Federal Deposit Insurance Corporation (FDIC).
Coinbase demands access to documents that may shed light on how the regulator first began deciding what crypto tokens it would classify as securities.
Coinbase’s Allegations
Coinbase has picked a fresh legal fight with the SEC and FDIC.
The two suits, filed in a Washington, D.C., district court, seek to uncover what Coinbase describes as a coordinated effort by these government agencies to block crypto firms from the US financial ecosystem. The exchange said it’s been snubbed by the SEC and the FDIC regarding documents that the American exchange argues should be available under the Freedom of Information Act (FOIA).
“Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry. SEC has claimed sweeping authority, but refuses to provide any rules, let alone consistent or coherent ones,” Coinbase Chief Legal Officer Paul Grewal said in a post on X (formerly Twitter).
At the SEC, Coinbase’s representative History Associates Inc. is seeking written communications in three closed cases for how the commission formally concluded what digital assets it thinks qualify as securities, including Ethereum (ETH). The San Francisco-headquartered exchange is launching this lawsuit shortly after the SEC’s indication that it has closed its investigation of “Ethereum 2.0” as a potential security.
“We asked the SEC for documents about closed investigations to shed light on how the SEC views its newfound, sweeping (and unlawful) authority,” CLO Grewal continued. “One of those investigations, which only recently closed, focused on ETH, which the SEC publicly announced is not a security in 2018. And the other investigations have been closed for years. But the SEC stonewalled our requests.”
And at the FDIC, Coinbase wants copies of “Pause Letters” sent to financial institutions asking them to indefinitely pause all “crypto-related activities.” The letters were described in a report from the FDIC’s Office of Inspector General (OIG) but never shared with the public.
Coinbase contends that the letters are “part of a deliberate and concerted effort by the FDIC and other financial regulators to pressure financial institutions into cutting off digital-asset firms from the banking system.”
Coinbase’s Ongoing Legal Clashes
This legal challenge joins a slew of other regulatory challenges between Coinbase and U.S. financial regulators.
Coinbase is currently embroiled in a courtroom scuffle with the SEC over the agency’s accusations that it allows Americans to trade unregistered securities on its platform.
The firm also took the SEC to court seeking a court order that would compel the Wall Street regulator to issue clearer guidelines on its application of securities laws to digital assets.
