According to a Fox Business report, Coinbase, the largest cryptocurrency exchange in the U.S., has launched a new legal offensive against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) to obtain documents related to their crypto regulation approaches. The lawsuits, filed Thursday in a Washington, D.C., district court, seek access to internal records that Coinbase alleges will reveal a “deliberate and concerted effort” by financial regulators to restrict crypto firms’ access to the federal banking system.
According to Coinbase, financial regulators, including the SEC, FDIC, and the Federal Reserve Board, have employed various tools to undermine the digital asset industry. A Coinbase spokeswoman emphasized the need for transparency from federal agencies in a statement to FOX Business.
The lawsuits follow Coinbase’s attempts to access information through the Freedom of Information Act (FOIA) regarding three SEC investigations into crypto firms and entrepreneurs between 2018 and 2024. Additionally, Coinbase sought details of “pause letters” sent by the FDIC between March 2022 and May 2023, asking banks to halt crypto-related activities until further guidance on associated risks was provided.
German Government Transfers $54.75M in Bitcoin to Kraken and CoinbaseCoinbase claims that both the SEC and the FDIC denied access to the requested information, despite legal entitlement under FOIA, which allows the public to request non-public records from federal agencies. This is not the first time the SEC has faced lawsuits for non-compliance with FOIA requests. On June 6, the American Securities Association sued the SEC to obtain documents related to investigations into record-keeping practices at major Wall Street firms, including Morgan Stanley, JPMorgan, and Goldman Sachs. In that case, the SEC denied access, citing potential jeopardy to similar investigations and enforcement actions.
Coinbase’s lawsuits suggest that the SEC and FDIC are using similar grounds for denial, questioning whether top agency leadership is employing coordinated pressure tactics to “choke off” the $2 trillion digital assets industry from the federal banking system. This move follows Erik Voorhees, founder of the cryptocurrency exchange Shapeshift, complaining on X about fintech firm Revolut shutting down his account due to “interacting with crypto.” Meanwhile, Wyoming-based crypto bank Custodia is appealing a judge’s decision allowing the Federal Reserve discretion to deny it access to a master account, which would provide access to the central bank’s liquidity facilities and payment services.
Coinbase hopes the lawsuits will clarify the SEC’s enforcement actions against the exchange, which are currently being litigated in a New York federal court. The SEC claims Coinbase is violating securities laws by offering unregistered securities in the form of cryptocurrencies on its platform. However, the Government Accountability Office reports a massive backlog of FOIA requests, with over 200,000 requests pending in 2022, suggesting a potentially lengthy wait for Coinbase to obtain the desired information.
