Coinbase Sues SEC and FDIC Over Denied FOIA Requests in Crypto Regulation Battle

Coinbase, the leading U.S. cryptocurrency exchange, has launched legal actions against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) for allegedly failing to comply with Freedom of Information Act (FOIA) requests. The lawsuits, filed on June 27 in the U.S. District Court for the District of Columbia, seek to compel these regulatory bodies to disclose information about their approaches to crypto regulation.

The exchange, through its contractor History Associates Inc., is pursuing documents from the SEC regarding how the agency determines which digital tokens qualify as securities. Specifically, Coinbase is interested in communications related to Ethereum’s transition to proof-of-stake, as well as two closed cases involving Zachary Coburn and Enigma MPC. The SEC has denied these requests, citing potential harm to ongoing enforcement proceedings.

From the FDIC, Coinbase is seeking copies of “pause letters” that were reportedly sent to financial institutions, advising them to halt crypto-related activities. The exchange argues that these letters are part of a broader effort by regulators to cut off the crypto industry from essential banking services.

Paul Grewal, Coinbase’s Chief Legal Officer, criticized the regulators’ actions on social media, stating, “This is no way to regulate. And this is no way to operate a transparent government.” He emphasized that the company is demanding better from financial regulators and looks forward to the court’s attention on these issues.

The lawsuits come amid ongoing tensions between Coinbase and U.S. regulators. The exchange is already embroiled in a separate legal battle with the SEC over allegations that it operates an illegal exchange trading unregistered securities. Coinbase has consistently advocated for clearer regulatory guidelines for the crypto industry.

These legal actions reflect the broader debate over crypto regulation in the United States. The crypto industry has long criticized what it calls “regulation by enforcement,” while SEC Chair Gary Gensler maintains that most cryptocurrencies are securities and should be regulated as such.