Coinbase, the renowned cryptocurrency exchange listed on Nasdaq as COIN, has taken legal action against two major regulatory bodies in the United States, the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The purpose of the lawsuit is to gain access to crucial documents that shed light on how these agencies approach the regulation of cryptocurrencies.
In a series of posts on social media platform X, Coinbase’s chief legal officer, Paul Grewal, expressed his frustration with the lack of clear guidelines provided by the SEC and the pressure exerted by the FDIC on financial institutions. Grewal stated that financial regulators have employed various tactics to hamper the growth of the digital asset industry. He criticized the SEC for claiming extensive authority without offering any consistent or coherent rules. Furthermore, he highlighted the FDIC’s actions in pressuring financial institutions to sever ties with the crypto industry.
Coinbase has filed lawsuits under the Freedom of Information Act, requesting transparency concerning investigations and communications that impact the crypto industry. These requests were initially made over a year ago, and the lawsuits aim to ensure that Coinbase and the public have access to important information to which they are entitled.
Grewal elaborated on their requests, stating that they asked the SEC for documents related to closed investigations in order to gain insights into how the agency perceives its broad and possibly illegal authority. One of the investigations in question focused on Ethereum (ETH), which the SEC publicly declared as not being a security back in 2018. The other investigations had been closed for several years, yet the SEC has been uncooperative in providing the requested information.
The FDIC was also approached by Coinbase, seeking the letters sent to financial institutions asking them to indefinitely pause crypto-related activities. This action was criticized by the FDIC’s Office of Inspector General for impeding innovation and growth in the crypto space. However, the FDIC has also failed to comply with Coinbase’s requests for these letters.
Grewal concluded by stating that the current approach to regulation is inadequate and that it is not conducive to operating a transparent government. He emphasized the need for improvement from financial regulators and expressed gratitude for the court’s attention to these critical issues. Coinbase looks forward to providing updates on the progress of the lawsuits in the future.
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