Coinbase Files Suits Against SEC, FDIC Over Compliance With Crypto Information Requests

Coinbase, the largest cryptocurrency exchange in the United States, has filed lawsuits against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) for not complying with information requests in closed cryptocurrency cases.

according to filings In the US District Court for the District of Columbia, Coinbase is seeking to force the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) to comply with the Freedom of Information Act (FOIA) to respond to information requests from industry participants.

Coinbase is suing the SEC and FDIC

Coinbase argues that the SEC has taken a new stance, claiming sweeping authority over the growing cryptocurrency sector. While the SEC’s claims have no basis in securities laws, the agency has failed to properly explain them and has instead waged an enforcement war against cryptocurrency companies.

The exchange said that the joint efforts made by the regulatory body with other financial supervisory bodies, such as the Financial Supervision Authority Federal Deposit Insurance CorporationThe divestment campaign from cryptocurrency companies aims to cripple the digital assets industry.

Coinbase and professional services research firm History Associates asked the SEC to prove its authority over the cryptocurrency space by providing records related to three investigations into such companies and entrepreneurs. One investigation is focusing on Ethereum’s original asset, ether, which the SEC said was not a security in 2018.

Last week, the agency closed its investigation into Ethereum 2.0, the proof-of-stake network, suggesting that Ethereum is still insecure. Although other investigations were closed for years, the SEC withheld all records based on the three cases. Coinbase claims the denial violates the regulator’s Freedom of Information Act (FOIA) obligations.

“The SEC’s new, ambiguous, and changing view of the securities laws deprives regulated parties of the fair notice that due process requires, leaving them to guess whether the SEC might view their activities as securities transactions and decide to subject them to investigation and prosecution.” and violations.” Coinbase insisted that the sanctions were reactionary.

Ongoing SEC lawsuit against Coinbase

Paul Grewal, chief legal officer at Coinbase, also revealed that the FDIC has blocked requests for letters asking financial institutions to pause cryptocurrency-related activities indefinitely. Interestingly, the FDIC’s Office of Inspector General has criticized such measures in the past, claiming that they will limit financial innovation and growth in the cryptocurrency space.

“This is no way to regulate. This is no way to run a transparent government. Today, we demand better from our financial regulators. We appreciate the court’s attention to these important issues and look forward to sharing updates in the future,” Grewal said.

Meanwhile, the Securities and Exchange Commission has filed an ongoing lawsuit against Coinbase, arguing that the company operates an unregistered securities exchange.