Coinbase Files Lawsuit Against US SEC and FDIC Over Alleged Efforts to “Cripple” Cryptocurrency ⋆ ZyCrypto

Publicly traded cryptocurrency exchange Coinbase has, through an intermediary, filed two civil lawsuits against the United States Securities and Exchange Commission and the Federal Deposit Insurance Corporation (FDIC).

Coinbase is demanding access to documents that could shed light on how the regulator began deciding which crypto tokens it would classify as securities.

Coinbase Allegations

Coinbase has entered into a new legal battle with the SEC and FDIC.

The two complaints, filed in a Washington, D.C. district court, seek to uncover what Coinbase describes as a coordinated effort by these government agencies to exclude cryptocurrency businesses from the U.S. financial ecosystem. The exchange said it was snubbed by the SEC and FDIC over documents that the American exchange said should be available under the Freedom of Information Act (FOIA).

“Financial regulators have used the multiple tools at their disposal to attempt to cripple the digital assets sector. The SEC has claimed absolute authority, but refuses to provide rules, much less consistent rules,” said Paul Grewal, Coinbase’s chief legal officer, in a post on X (formerly Twitter).

At the SEC, Coinbase representative History Associates Inc. is seeking written submissions in three closed cases on how the commission formally concluded which digital assets it believes qualify as securities, including Ethereum (ETH) . The San Francisco-based exchange is launching the lawsuit shortly after the SEC indicated it had closed its investigation into “Ethereum 2.0” as a potential security.

“We have requested documents from the SEC on closed investigations in order to shed light on how the SEC views its broad (and illegal) new authority,” CLO Grewal continued. “One of these investigations, which was only recently closed, focused on ETH, which the SEC publicly announced was not a security in 2018. And the others Investigations have been closed for years. But the SEC blocked our requests.

Coinbase also wants to obtain from the FDIC copies of “suspension letters” sent to financial institutions asking them to indefinitely suspend all “cryptocurrency-related activities.” These letters were described in a report by the FDIC Office of Inspector General (OIG) but were never made public.

Coinbase maintains that these letters are “part of a deliberate and concerted effort by the FDIC and other financial regulators to pressure financial institutions to exclude digital asset businesses from the banking system.”

Ongoing legal disputes surrounding Coinbase

The legal challenge adds to a series of other regulatory challenges between Coinbase and U.S. financial regulators.

Coinbase is currently embroiled in a legal battle with the SEC over the agency's accusations that it allows Americans to trade unregistered securities on its platform.

The company also sued the SEC seeking a court order that would require the Wall Street regulator to issue clearer guidance on how securities laws apply to digital assets.