Coinbase Sues SEC and FDIC Over Freedom of Information Requests

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Coinbase logo with gavel and legal documents representing the lawsuit against SEC and FDIC.
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Coinbase Sues SEC and FDIC Over Freedom of Information Requests

The crypto exchange titan them took a big gamble when it filed a lawsuit against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). This has happened after the authorities had repeatedly stated that the requests for information that were filed under the Freedom of Information Act (FOIA) were refused.

Seeks Policy Clarity

The lawsuit, which was filed in the U.S. District Court of Columbia, accuses the SEC and FDIC of blocking efforts to get clear answers for the questions about crypto-related policies. The Act of Freedom of Information is supposed to be made possible to the transparency of the government to citizens, however, Coinbase put the blame on these institutions for not accomplishing their duties.

Background of the FOIA Requests

In 2023, Them hired the company History Associates Inc. to petition for disclosure of records that would reveal the SEC’s opinion on Ethereum and its native cryptocurrency, Ether (ETH). The petitions also included those that contained information about cease-and-desist orders that were issued against Enigma MPC and the founder of Etherdelta Zachary Coburn.

In conjunction with the above, Coinbase requested copies of the relevant letters to financial institutions as a result of the October FDIC report that suggested a directive for them to discontinue operations related to crypto-assets. Ironically, these appeals were turned down several times, therefore, the current legal battle.

Allegations of Deliberate Obstruction

Coinbase claims that the SEC, in particular, had tried to purposefully make the U.S. financial sector free from the confinements of virtual currencies. According to the lawsuit, the SEC’s act of not revealing documents from completed inspections bars Coinbase from understanding a regulated environment.

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“The dialogue of the SEC refusing to give the documents of investigations that settled in the past years is aimed at completely off-putting the legitimate reasons for which Coinbase requested the Coburn and Enigma MPC documents-to get the opinion therein the SEC’s enforcement blizzard against the digital asset industry is based on”, the lawsuit states.

Increased Conflict with the SEC

Coinbase and the SEC clash in this legal case along with the exchange’s previous skirmishes with the regulatory body. The SEC has been under public scrutiny for its “regulation by enforcement” strategy where it has been criticized by Coinbase earlier.

The fact that Coinbase is now in the process of reviewing different SEC investigations is the biggest factor. Last June, the SEC brought a lawsuit against the Coinbase for allegedly the unauthorized trading and operating of an illegal securities exchange. Moreover, the petition Coinbase filed in 2022 about the rules is going ahead in the U.S. Court of Appeals for the Third Circuit.

With the company engaged in a struggle to gain regulatory certainty, this lawsuit has become a major step in defying the SEC and the FDIC that are responsible for crypto regulations.

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