Coinbase files lawsuits against SEC and FDIC urging for transparent crypto regulations

Coinbase, a leading cryptocurrency exchange, has made a bold move by filing lawsuits against two powerful federal agencies, the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The purpose of these lawsuits, announced by Coinbase’s Chief Legal Officer Paul Grewal on social media, is to obtain crucial information held by these agencies.

The legal action, taken under the Freedom of Information Act (FOIA), aims to compel the SEC and FDIC to release information on their investigations and regulatory actions that have impacted the digital asset industry. Coinbase alleges that the SEC has been inconsistent and opaque in its regulation of digital assets. Despite declaring in 2018 that Ether is not a security, the SEC has failed to provide clear guidance or modify its rules to accommodate digital asset firms. Instead, it has engaged in what Coinbase describes as a “scorched-earth enforcement war” to cripple the industry.

Coinbase’s lawsuit against the SEC seeks documents related to closed investigations, including those focused on Ether, in order to gain insight into the SEC’s current and past regulatory views. In addition to the SEC, Coinbase’s legal action also targets the FDIC. The company alleges that the FDIC has pressured financial institutions to distance themselves from crypto-related activities, which has hindered innovation in the crypto sector. Coinbase demands transparency from the FDIC and urges the agency to disclose communications instructing banks to halt dealings with crypto entities.

The lawsuit argues that the SEC’s refusal to release essential documents violates the FOIA, denying public access to critical regulatory insights. Coinbase, represented by consultancy firm History Associates Incorporated, seeks not only transparency but also a coherent regulatory framework that supports the growth of the industry.

This legal challenge by Coinbase highlights the urgent need for transparent and consistent regulation in the rapidly expanding digital asset sector. By compelling the SEC and FDIC to comply with FOIA requirements and disclose essential records, Coinbase aims to establish clarity and fairness in regulatory practices.

This lawsuit could have significant implications for the future of cryptocurrency regulation. It remains to be seen how it will unfold and what impact it will have on the industry. Stay tuned for further updates.