Today (Thursday), Coinbase filed lawsuits against the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). According to a report from FoxBusiness, the lawsuits claim that both agencies failed to fulfill Freedom of Information Act (FOIA) requests submitted to the U.S. District Court for the District of Columbia.
Alleging Regulatory Opacity
The lawsuits from Coinbase allege that the SEC and FDIC neglected to provide requested information under the FOIA, impacting transparency in regulatory dealings. Coinbase accuses the federal agencies of actions perceived as attempting to marginalize the cryptocurrency industry within the banking sector.
BREAKING: ???????? COINBASE IS SUING THE SEC, ALLEGING REGULATORS ARE TRYING TO CRIPPLE THE CRYPTO INDUSTRY. pic.twitter.com/bD1B1Vny1r
— Bitcoin Magazine (@BitcoinMagazine) June 27, 2024
Specifically, Coinbase's FOIA requests to the SEC aimed to obtain information concerning the agency's stance on Ethereum, particularly its transition to a proof-of-stake (PoS) consensus mechanism with Ethereum 2.0.
Additionally, Coinbase sought records related to prior investigations involving individuals such as Zachary Coburn and Enigma MPC, facilitated through its consultant firm, History Associates Inc.
Lawsuit Advances despite Partial Dismissal
Earlier, a federal judge in Manhattan permitted the SEC to continue its lawsuit against Coinbase, as reported by Finance Magnates. While dismissing one claim, the ruling sets the stage for a protracted legal battle. US District Judge Katherine Failla partially granted Coinbase's motion to dismiss the SEC's allegations of securities law violations.
The decision underscores ongoing regulatory challenges faced by digital asset firms. Despite a partial victory for Coinbase, the ruling aligns with the SEC's crypto regulation stance. Coinbase's Chief Legal Officer, Paul Grewal, affirmed readiness to contest SEC claims, expressing confidence in legal arguments.
The lawsuit, initiated in June last year, accuses Coinbase of facilitating unregistered securities trading and operating unlawfully as a securities exchange.
Judge Failla's decision permits most claims to proceed, excluding allegations of unregistered broker activity via Coinbase's wallet app. This legal clash is pivotal in the SEC's efforts to regulate the digital asset market under traditional securities laws.
This article was written by Tareq Sikder at www.financemagnates.com.
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