SEC and FDIC Face Lawsuit from Coinbase Over Information Requests

Coinbase has taken legal action against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) in a U.S. District Court in Colombia. The cryptocurrency exchange accuses these agencies of unfairly rejecting Freedom of Information Act (FOIA) solicitations.

The complaint, filed through consultancy firm History Associates Inc., claims the SEC and FDIC have stonewalled crypto-related policy clarity and violated FOIA obligations. FOIA requests allow public access to records held by U.S. watchdogs, which Coinbase asserts were unjustly denied. In 2023, Coinbase employed History Associates to petition for the release of documents related to the SEC’s approach to Ethereum and the classification of its native crypto, Ether (ETH). The firm also sought investigative information on cease-and-desist orders issued to Enigma MPC and Etherdelta founder Zachary Coburn.

Furthermore, after an FDIC report in October directed financial institutions to pause all operations related to crypto-assets, Coinbase requested copies of the letters. Both the SEC and FDIC denied these requests multiple times, leading Coinbase to pursue legal action. According to the exchange, these agencies, especially the SEC, have engaged in a deliberate effort to exclude cryptocurrency from the U.S. financial system.

Ongoing Regulatory Battles

“The SEC’s rationale for withholding documents from investigations that concluded in settlements years ago is tailor-made to frustrate the legitimate purposes for which Coinbase sought the Coburn and Enigma MPC documents in the first place—to understand the view of the law that underlies the SEC’s enforcement blitzkrieg against the digital asset industry,” reads an excerpt from the lawsuit.

This lawsuit adds to a series of disputes between Coinbase and the SEC. The complaints highlight what Coinbase and other crypto industry participants describe as a “regulation by enforcement” approach. SEC Chair Gary Gensler has frequently criticized the digital asset landscape for fraud practices and non-compliance. Coinbase is now engaged with the SEC on three fronts seeking regulatory clarity. In June, SEC attorneys sued Coinbase for allegedly facilitating unregistered securities trading and operating an illegal securities exchange.

Additionally, Coinbase filed a rule-making petition in 2022, which has advanced to the U.S. Court of Appeals for the Third Circuit. This ongoing legal battle underscores the tension between regulatory bodies and the burgeoning cryptocurrency industry.