Coinbase Initiates Legal Actions against SEC and FDIC over FOIA Compliance

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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