Coinbase has taken legal action against the SEC and FDIC, aiming to increase transparency in crypto regulation and protect investors in Bitcoin and XRP. The lawsuit, filed in Washington, D.C., seeks access to crucial documents concerning the regulatory policies of both agencies regarding cryptocurrencies.
This move by Coinbase is part of its ongoing efforts to advocate for openness from financial authorities while safeguarding the interests of cryptocurrency investors. According to a spokesperson from Coinbase speaking to FOX Business, the company alleges a systematic effort by the SEC, FDIC, and other regulators to restrict crypto companies’ access to the federal banking system.
The legal action follows unsuccessful attempts by Coinbase to obtain information under the Freedom of Information Act (FOIA) regarding three SEC investigations into cryptocurrency firms and entrepreneurs spanning from 2018 to 2024. These investigations, including one involving the Ethereum blockchain network, are pivotal in understanding regulatory actions affecting the digital asset industry.
Coinbase also sought details on “pause letters” sent by the FDIC to certain banks between March 2022 and May 2023, urging them to halt cryptocurrency-related activities pending further risk assessments. Despite legal entitlements under FOIA, Coinbase claims the SEC and FDIC withheld requested information.
The company accuses regulators of implementing strategies akin to “Operation Chokepoint 2.0,” drawing parallels to past efforts aimed at cutting off banking services to high-risk industries. This alleged effort, according to Coinbase, stifles innovation and growth within the $2 trillion digital asset market.
Additionally, Coinbase anticipates its legal actions will shed light on the SEC’s enforcement actions against the exchange. Currently, the SEC contends that Coinbase violated securities regulations by potentially offering unregistered securities through cryptocurrencies. This regulatory uncertainty, Coinbase argues, hampers industry players’ ability to navigate compliance requirements effectively.
Despite regulatory challenges, Coinbase continues to expand cryptocurrency trading opportunities, recently launching pre-launch trading for early access to alternative coins. This initiative underscores Coinbase’s commitment to advancing crypto trading amidst regulatory uncertainties.