Cryptocurrency exchange Coinbase has filed a lawsuit against two U.S. federal agencies, the Securities and Exchange Commission (SEC) and Federal Deposit Insurance Corporation (FDIC), for allegedly failing to comply with its Freedom of Information Act (FOIA) requests.
The complaint, which was filed today, June 27, 2024, at the U.S. District Court of Columbia, accuses the federal watchdogs of attempting to exclude the cryptocurrency industry from the banking sector. It also alleges that the SEC has failed to provide a clear and consistent stance on applying securities laws to the crypto market.
A key focus of the FOIA requests to the SEC was information about the agency’s perspective on Ethereum, particularly its transition to a Proof-of-Stake (PoS) consensus algorithm.
The complaint noted that Coinbase’s retainer, History Associates, specifically requested access to records regarding Ethereum’s transition to PoS. The firm reported that the SEC denied both their initial request and subsequent appeal.
It also claimed that it submitted other FOIA requests for records related to two closed investigations involving Enigma MPC and Zachary Coburn, and the SEC denied these requests, citing potential harm to ongoing legal proceedings.
This legal action by Coinbase highlights ongoing tensions between the cryptocurrency industry and U.S. regulatory bodies, particularly concerning transparency and applying existing financial regulations to the evolving crypto sector.
Notably, this development follows a complaint filed by blockchain software development company Consensys against the SEC in April 2024. The complaint alleged that the SEC’s Director of Enforcement, Gurbir Grewal, had approved an investigation into “Ethereum 2.0” in 2023, targeting corporate entities and individuals over claims that the network’s initial coin offering (ICO) in 2014 might be a security offering. Consensys later reported that the SEC had closed this investigation.
As of press time, neither the SEC nor the FDIC have commented on the lawsuit.
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