In a recent development, Coinbase, the largest cryptocurrency exchange in the United States, has launched a campaign Legal attack v. Securities and Exchange Commission (SEC) and Federal Deposit Insurance Corporation (FDIC).
The lawsuits, filed in Washington, D.C., District Court, aim to secure access to internal records that would shed light on what Coinbase describes as a “deliberate and concerted effort” by regulatory agencies to pressure banks to block cryptocurrency companies from accessing the federal government. Banking system.
Coinbase challenges the SEC and FDIC
Coinbase insists that financial regulators, including the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve, have long sought to obstruct… Digital assets industry. The exchange is seeking transparency from the federal government, demanding clarity on the regulatory landscape surrounding cryptocurrencies.
Coinbase’s legal action follows its previous attempts to obtain information through the Freedom of Information Act (FOIA) in connection with three SEC investigations into cryptocurrency companies and entrepreneurs between 2018 and 2024, including the recently completed investigation into the… Ethereum blockchain.
By obtaining the required information, the exchange hopes to better understand the SEC’s evolving position on digital assets over the years.
The company is also seeking details on “pause letters” that the FDIC sent to select banks between March 2022 and May 2023, which requested a temporary halt to any… Cryptocurrency related activities Until further guidance is provided on the associated risks.
Following a report by the FDIC’s Office of Inspector General, these letters came to light, which outlined the agency’s strategies for addressing cryptocurrency risks. Despite its legal right to the information requested under the Freedom of Information Act, Coinbase claims that both the SEC and the FDIC blocked access.
This lawsuit against the SEC marks the second time the agency has faced this month Legal action For failure to comply with Freedom of Information Act requests. The SEC filed a lawsuit against the SEC on June 6 to obtain documents related to investigations into record-keeping practices at major Wall Street firms.
Regulatory barriers
Coinbase alleges that the SEC and FDIC cited similar reasons for denying access to the requested information, including concerns that disclosure could jeopardize ongoing investigations and enforcement actions against other entities.
The exchange specifically refers to “Operation Chokepoint 2.0,” a term used in the cryptocurrency industry to describe what they consider to be a “coordinated effort” by Financial regulators To restrict or block cryptocurrency companies’ access to banking services, similar to the original “Operation Chokepoint” initiative in 2013.
Coinbase’s lawsuits aim to reveal whether senior leadership at the SEC and FDIC used coordinated pressure tactics to stifle the $2 trillion digital asset industry’s access to the federal banking system.
The Stock Exchange asserts that there is no consistent guidance from the SEC regarding the application of securities laws to… Digital assets It harms industry participants.
Although Coinbase hopes these lawsuits will provide insight into the SEC’s enforcement actions against the exchange, which is currently being tried in federal court in New York, it may face delays in obtaining the requested information.
The Government Accountability Office recently reported a significant backlog in Freedom of Information Act requests attributed to the increased volume and complexity of information sought by individuals and businesses in recent years.
As Coinbase continues its legal battle, the cryptocurrency industry will closely monitor the outcome of these lawsuits, as they will likely impact the regulatory landscape and contribute to increased transparency surrounding cryptocurrency regulations and enforcement.
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