Coinbase Sues SEC and FDIC Over Crypto Regulations

Coinbase has initiated two lawsuits against the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) over their approach to crypto regulations.

Coinbase Battles for Transparency

According to the lawsuits filed Thursday, the crypto exchange is suing both regulators in order to gain access to internal records that will shed light on what it describes as a “deliberate and concerted effort by the SEC, FDIC and other financial regulators” to pressure banks to deny crypto firms access to the federal banking system.

“For years, financial regulators – including the SEC, the FDIC, and the Federal Reserve Board – have used every tool at their disposal to try to cripple the digital-asset industry. We demand transparency from our federal government,” a Coinbase spokeswoman said. 

Per tweet from Coinbase chief legal officer, this move comes following the exchange’s attempts to retrieve information through the Freedom of Information Act (FOIA) regarding three SEC investigations into crypto firms and entrepreneurs between 2018 and 2024, especially its recently closed probe into the Ethereum blockchain network. 

The exchange stated that these requests were aimed at grasping the agency’s approach to cryptocurrency regulation and enforcement comprehensively. However, it was denied despite being legally entitled to it under the Freedom of Information Act (FOIA), which allows the public to request access to non-public records from federal agencies.

Specific Complaints Against the FDIC

Furthermore, Coinbase grievance with the FDIC centers on the issuance of “pause letters” to a handful of banks between March 2022 and May 2023, asking them to pause any crypto-related activity until it could provide further guidance on the risks associated with it.

The exchange had requested that the regulator share details of these letters, criticizing that these actions will limit financial innovation and growth in the crypto space. 

“This is no way to regulate. And this is no way to operate a transparent government. Today we demand better from our financial regulators. We appreciate the Court’s attention to these important issues and look forward to sharing updates in the future,” the firm’s chief legal officer stated.