Yesterday (27), the US exchange Coinbase filed a lawsuit against the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), alleging that the two agencies have not complied with the Freedom of Information Act (FOIA) since 2023 and have repeatedly refused Coinbase’s requests for authorization to disclose relevant documents, criticizing the federal agencies for leading the exclusion of the cryptocurrency industry.
Content Index
Toggle
Coinbase sues SEC and FDIC
SEC repeatedly fails to provide legal documents
Application to disclose Ethereum documents rejected
SEC: Will affect enforcement proceedings
FDIC is killing the cryptocurrency industry
Yesterday, Coinbase filed separate lawsuits against the SEC and FDIC, accusing the two agencies of failing to comply with the FOIA. It is reported that Coinbase hired consulting firm History Associates last year to submit FOIA requests to the SEC and FDIC for access to relevant documents. However, these requests were repeatedly denied.
Advertisement – Scroll down for more content
To this end, the company has now decided to sue these two federal agencies and request the court to compel them to comply with FOIA and disclose these documents:
In the past two years, federal financial regulatory agencies including the SEC, FDIC, and the Federal Reserve have used every regulatory tool available to weaken the digital asset industry. This FOIA lawsuit aims to reveal the role and actions of these agencies in this illegal plan. History Associates is the plaintiff, and Coinbase is a related party.
SEC repeatedly fails to provide legal documents
Last year, History Associates requested access to the SEC’s views on Ethereum and ETH, as well as relevant copies and records retained by the SEC after Ethereum transitioned to the Proof of Stake (PoS) consensus mechanism. The lawsuit stated that the SEC rejected this request in October 2023, claiming that it could not find or identify any information that could respond to the request. However, after appealing this decision, the SEC stated that the relevant documents are protected by exemption rules.
In response, History Associates and Coinbase argued that these exemption rules do not apply in this case and requested the SEC to disclose this information through the current FOIA lawsuit. Previously, Consensys mentioned in a lawsuit filed against the SEC in April that the SEC’s Enforcement Director Gurbir Grewal had approved an investigation into “Ethereum 2.0” in March 2023 to collect information about individuals and entities buying and selling Ethereum, indicating that the SEC’s investigation into Ethereum-related documents does exist.
(
Consensys sues SEC and supports Ethereum, pointing out the “four reasons” why ETH is not a security
)
The company later stated that the SEC stated that it is ending the investigation into Ethereum 2.0.
In addition, History Associates also requested the disclosure of records of two closed investigations involving Zachary Coburn, the founder of Etherdelta, and Enigma MPC. Both were sued by the SEC for issuing tokens as securities and founding a cryptocurrency exchange, and reached settlements with the SEC in 2018 and 2020, respectively. It is imaginable that the SEC rejected these requests, stating that they may harm ongoing enforcement actions.
Coinbase emphasized in the lawsuit:
The SEC’s refusal to disclose documents that have already been settled several years ago has hindered Coinbase’s attempt to understand the SEC’s legal perspective on law enforcement in the digital asset industry. It is obvious that the SEC’s behavior has violated its FOIA obligations.
As for the FDIC, History Associates accused the agency of attempting to weaken the cryptocurrency industry by issuing “cease-and-desist letters” to multiple banks. This can be seen in previous public statements or rumors from the FDIC and the Federal Reserve.
(
Insiders: Buyers of Signature must agree to abandon all cryptocurrency business; FDIC denies involvement
)
The FDIC Inspector General’s Office’s 2023 report pointed out that the agency had been issuing “cease-and-desist letters” to some financial institutions from March 2022 to May 2023, asking them not to participate in or expand cryptocurrency-related businesses and providing more information on this. Coinbase stated that these letters can be considered part of “Choke Point 2.0”, which aims to exclude digital asset companies from necessary banking services:
The cease-and-desist letters are not for so-called “good regulation,” but rather a clear intention: attempting to completely stop cryptocurrency activities.
(
The US is killing the cryptocurrency industry; the New York Department of Financial Services refutes Choke Point 2.0
)
At the same time, when History Associates requested the disclosure of relevant letters, they were also rejected by the FDIC, stating that revealing the contents of the letters would involve important information about specific banks and would harm the confidentiality and trust between financial and regulatory institutions.
Choke Point 2.0
Coinbase
FDIC
SEC
Related reading
Is it safe with “FDIC insurance”? In-depth analysis of the collapse, hidden dangers, and regulatory black hole of Fintech startup Synapse
Binance.US no longer supports USD deposits and withdrawals, and customer assets are not protected by FDIC.