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Coinbase has filed a lawsuit against the SEC and FDIC, accusing the agencies of stifling the crypto industry and demanding transparency under the Freedom of Information Act (FOIA).
Read more to learn more about this sensational development!
Coinbase Challenges Regulatory Actions
In a bold move, Coinbase Chief Legal Officer Paul Grewal announced on social media that the cryptocurrency exchange has filed lawsuits against the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The legal action, taken under the Freedom of Information Act (FOIA), aims to compel the agencies to release information on their investigations and regulatory actions impacting the digital-asset industry.
Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry. @SECGov has claimed sweeping authority, but refuses to provide any rules, let alone consistent or coherent ones. While @FDICgov pressured financial institutions to cut…
— paulgrewal.eth (@iampaulgrewal) June 27, 2024
Accusations Against the SEC
Coinbase’s complaint highlights the SEC’s inconsistent and opaque stance on the regulation of digital assets. The SEC, which declared in 2018 that Ether is not a security, has refused 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’ designed to cripple the industry. The lawsuit seeks documents related to closed investigations, including those focused on Ether, to understand the SEC’s current and past regulatory views.
FDIC’s Pressure on Financial Institutions
The lawsuit also targets the FDIC, alleging that the agency pressured financial institutions to halt crypto-related activities. This action, criticised by the FDIC’s own Office of Inspector General, is seen as an attempt to stifle innovation and growth in the crypto sector. Coinbase is demanding that the FDIC release letters sent to banks, which ordered them to pause their involvement with crypto companies.
Legal Bias for the Lawsuit
Filed in the United States District Court for the District of Columbia, the lawsuit argues that the SEC has violated FOIA by withholding records that should be publicly accessible. The complaint asserts that the SEC’s refusal to release information on closed investigations into digital assets is unjustified and hampers the ability of the public and businesses to understand and comply with regulations. Coinbase is represented by History Associates Incorporated, a consultancy with expertise in obtaining records through FOIA requests.
Coinbase Complaint: Seeking Transparency and Accountability
Coinbase’s legal action underscores the need for transparency and fair regulation in the rapidly growing digital-asset industry. The lawsuit calls for the SEC and FDIC to comply with FOIA, produce requested documents, and provide a clear and consistent regulatory framework. The outcome of this case could have significant implications for the future of cryptocurrency regulation in the United States.
In conclusion, Coinbase’s lawsuit against the SEC and FDIC highlights the ongoing battle for clear and fair regulation in the crypto industry. As the case unfolds, it could pave the way for greater transparency and a more supportive regulatory environment for digital assets.
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