Coinbase Sues SEC and FDIC Alleges Noncompliance in Document Sharing Attempting to Marginalize Crypto Industry

Yesterday (27), the American exchange Coinbase filed lawsuits against the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), alleging non-compliance with the Freedom of Information Act (FOIA) since 2023. Coinbase claimed that both agencies repeatedly denied its requests for authorization to disclose relevant documents, accusing federal authorities of leading efforts to marginalize the cryptocurrency industry.

Toggle
Coinbase Sues SEC and FDIC
SEC Repeatedly Non-compliant in Providing Legal Documents
Requests to Disclose Ethereum Documents Denied
SEC: Impacts Enforcement Proceedings
FDIC Seeks Extermination of Crypto Industry
Coinbase filed separate lawsuits against the SEC and FDIC on Thursday, accusing both agencies of failing to adhere to the Freedom of Information Act. According to reports, Coinbase engaged consultancy firm History Associates last year to submit FOIA requests to the SEC and FDIC to review relevant documents. However, these requests were consistently rejected.

Advertisement – Continue reading below

In response, the company has now decided to sue both federal agencies, seeking court orders to enforce FOIA compliance and disclose these documents:
Over the past two years, federal financial regulatory agencies including the SEC, FDIC, and Federal Reserve have utilized every regulatory tool available to weaken the digital asset industry. This FOIA lawsuit aims to expose the roles and actions of these agencies in this illicit scheme.

History Associates acts as the plaintiff, with Coinbase listed as an interested party.
SEC Repeatedly Non-compliant in Providing Legal Documents
Last year, History Associates requested access from the SEC regarding their stance on Ethereum and ETH, as well as relevant copies and records following Ethereum’s shift to Proof of Stake (PoS) consensus mechanism.
The lawsuit stated that the SEC denied this request in October 2023, claiming an inability to locate or identify any information that could respond to the request. However, upon appealing this decision, the SEC cited exemption rules protecting the relevant documents.

In response, History Associates and Coinbase argued that these exemption rules were not applicable in this situation, and through the current FOIA lawsuit, they are demanding that the SEC disclose this information.
Previously, Consensys mentioned in a lawsuit against the SEC in April that SEC Enforcement Director Gurbir Grewal had approved an investigation into “Ethereum 2.0” in March 2023 to gather information on individuals and entities trading Ethereum, confirming the existence of SEC investigations into Ethereum-related documents.

(
Consensys sues SEC, backs Ethereum, pointing out “four reasons” ETH is not a security
)
The company later indicated that the SEC stated it was concluding its investigation into Ethereum 2.0.
Additionally, History Associates also requested disclosure of records from two closed investigations involving Etherdelta founder Zachary Coburn and Enigma MPC, both of whom were sued for issuing tokens deemed securities and founding a crypto exchange, settling with the SEC in 2018 and 2020 respectively.
Understandably, the SEC rejected these requests, citing potential harm to ongoing enforcement actions.
Coinbase emphasized in the lawsuit:
The SEC’s refusal to disclose settled case documents from several years ago has obstructed Coinbase’s efforts to understand the SEC’s legal perspectives on enforcement within the digital asset industry. Clearly, such actions by the SEC constitute a violation of its FOIA obligations.
As for the FDIC, History Associates accused the agency of attempting to weaken the crypto industry through issuing “cease and desist” letters to multiple banks, as seen in previous public statements or rumors involving the FDIC and Federal Reserve.

(
Sources: Buyers of Signature must agree to waive all cryptocurrency business; FDIC comes out to deny
)
FDIC’s Office of Inspector General’s 2023
report
indicated that the agency issued “pause letters” to certain financial institutions from March 2022 to May 2023, requesting them not to engage or expand in crypto-related businesses and providing further information on this.
Coinbase stated that these letters are part of “Choke Point 2.0,” an attempt to exclude digital asset companies from essential banking services:
Pause letters are not about so-called “good-faith regulation” but rather a clear intent: to effectively stop crypto activities.
(
U.S. comprehensive hunt for the crypto industry, New York Department of Financial Services rebuts Choke Point 2.0
)
Simultaneously, when History Associates requested disclosure of these letters, the FDIC also rejected them:
Revealing the contents of these letters would involve significant information about specific banks and could undermine confidentiality and trust between financial and regulatory agencies.

Choke Point 2.0
Coinbase
FDIC
SEC


Related Reading
Is “FDIC insurance” safe? In-depth study of Fintech startup Synapse’s downfall, concerns, and regulatory black hole
Binance.US no longer supports USD deposits and withdrawals; customer assets are not FDIC protected