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America’s largest crypto exchange Coinbase sues the U.S. SEC and the FDIC to obtain documents relating to the agencies’ efforts on crypto regulations.
According to a FOX Business report, Coinbase filed the lawsuits in a district court in Washington D.C., accusing the SEC and FDIC (Federal Deposit Insurance Corporation) of refusing to comply with its Freedom of Information (FOIA) requests.
The exchange contended that these agencies are compelling banks to cut off crypto companies from the federal banking system, emphasizing that such a move could sabotage the industry’s growth.
The Coinbase lawsuit mirrors concerns within the crypto industry over Operation Chokepoint 2.0, which describes regulators’ efforts to restrict crypto firms from accessing banking services.
Coinbase’s FOIA Requests
Furthermore, Coinbase asked the court to order the FDIC and SEC to comply with its FOIA request. For context, Coinbase recently filed different FOIA requests with the agencies.
In particular, it asked the SEC to provide information concerning three of its crypto-related investigations between 2018 and 2024.
One of the inquiries revolves around the SEC’s investigation into ETH and Ethereum’s developer Consensys. Recall that the SEC recently closed its investigation into Ethereum 2.0 following a multi-month scrutiny. Interestingly, the agency did not recommend any enforcement action regarding its investigation. However, Coinbase sought information about how the SEC views ETH in its FOIA request.
Additionally, the exchange sent an FOIA request to the FDIC asking for information about the agency’s so-called ‘pause letters.’ Notably, the FDIC sent letters to selected U.S. banks between March 2022 and May 2023, ordering them to steer clear of crypto-related activities until it clarifies the risks associated with the asset class.
Coinbase claimed that the FDIC and SEC denied it access to the information, citing concerns about jeopardizing ongoing enforcement investigations. As a result, it asked the court to force the agencies to comply with the FOIA requests.
Coinbase Seeks to Understand Motive Behind SEC Enforcement Action
In addition to gaining access to the information, Coinbase also hopes that the lawsuit will shed light on the rationale behind the SEC’s litigation against the firm.
It bears mentioning that the SEC and Coinbase have been embroiled in a legal battle since June 2023. As reported earlier, the SEC alleged that Coinbase violated federal laws by facilitating the trading of assets deemed as securities. The suit is still ongoing in a New York federal court.