Coinbase, the largest cryptocurrency exchange in the United States, has taken legal action against the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) in an effort to obtain documents related to the agencies’ activities regarding crypto regulations. The lawsuits were filed in a district court in Washington D.C., with Coinbase accusing the SEC and FDIC of refusing to comply with its Freedom of Information (FOIA) requests. The exchange argues that these agencies are pressuring banks to sever ties with crypto companies, a move that could hinder the industry’s growth. This lawsuit echoes concerns within the crypto industry over Operation Chokepoint 2.0, which refers to regulators’ attempts to restrict crypto firms’ access to banking services.
Coinbase has requested that the court order the SEC and FDIC to comply with its FOIA requests. Recently, the exchange filed different FOIA requests with the agencies. In one request, Coinbase asked the SEC to provide information about three crypto-related investigations conducted between 2018 and 2024. One of these investigations focused on Ethereum (ETH) and its developer Consensys. It is worth noting that the SEC recently closed its investigation into Ethereum 2.0 without recommending any enforcement action. However, Coinbase is seeking information about the SEC’s perspective on ETH in its FOIA request.
Furthermore, Coinbase sent an FOIA request to the FDIC, asking for information about the agency’s “pause letters.” These letters were sent to selected U.S. banks between March 2022 and May 2023, instructing them to refrain from engaging in crypto-related activities until the FDIC clarifies the risks associated with this asset class. Coinbase claims that the FDIC and SEC denied it access to this information, citing concerns about jeopardizing ongoing enforcement investigations. As a result, Coinbase is seeking a court order to compel the agencies to comply with its FOIA requests.
In addition to gaining access to the requested information, Coinbase hopes that the lawsuit will provide insight into the reasoning behind the SEC’s legal action against the company. Since June 2023, Coinbase has been locked in a legal battle with the SEC, which alleges that the exchange violated federal laws by enabling the trading of assets classified as securities. The lawsuit is still ongoing in a federal court in New York.
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