Regulation
Coinbase sues SEC, FDIC to see documents related to investigation
Coinbase is suing the Securities and Exchange Commission and the Federal Deposit Insurance Corporation to force regulators to hand over documents related to cryptocurrency investigations.
The cases, filed under the Freedom of Information Act, fall under Coinbase’s case ongoing legal battle with the SECin which the regulator accused the cryptocurrency firm of operating an unregistered stock exchange.
The lawsuits were filed by History Associates, a consultant retained by Coinbase to request the documents, in U.S. District Court in Washington, D.C.
“Financial regulators have used multiple tools at their disposal to try to cripple the digital asset industry,” said Coinbase Chief Legal Officer, Paul Grewal, published Thursday on the social media site X.”[The SEC] has claimed absolute authority, but refuses to provide rules, let alone coherent and consistent rules. [Meanwhile, the FDIC] pressured financial institutions to isolate the sector from the banking system.”
Coinbase “has asked the SEC for documents on the closed investigations to shed light on how [it] sees its newfound, broad (and illegal) authority,” Grewal added. “One of those investigations, only recently closed, focused on [Ethereum]which the SEC publicly announced was not a security in 2018. And the other investigations have been closed for years.”
The cryptocurrency firm wants to know how the SEC began deciding which tokens would be considered securities and which would not be considered securities.
“We asked the FDIC about the letters they sent to financial institutions asking them to indefinitely ‘pause’ cryptocurrency-related activities, an action that the FDIC Office of Inspector General criticized for creating a “ risk that the FDIC will inadvertently limit financial institutions’ innovation and growth in the crypto space,” Grewal wrote.
Both agencies had “obstructed” Coinbase’s requests, he added.
Coinbase specifically accused the SEC of “regulate through the application of measures”. At least one SEC commissioner, Hester Peirce, has done so questioned the practicemashed potato.
Coinbase wants the court to force the hand of the FDIC and SEC in producing the documents.
The SEC declined to comment on the Banking Dive lawsuits. The FDIC did not respond to requests for comment.