Coinbase Sues SEC and FDIC Over Denied Access to Crypto Regulatory Records

• Coinbase is suing the U.S. SEC and FDIC, alleging a coordinated effort to restrict crypto companies from the federal banking system.
• The lawsuits follow denied FOIA requests, with Coinbase arguing against exemptions claimed by the SEC regarding documents on Ethereum and past investigations into crypto entities.

The largest crypto exchange in the U.S. Coinbase is suing the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) after its Freedom of Information Act (FOIA) requests were denied, the company revealed on Thursday. 

Filed in a Washington, D.C., district court, the lawsuits aim to obtain internal records from both agencies. Coinbase alleges that these records will expose a coordinated effort by financial regulators, including the SEC and FDIC, to block crypto companies from accessing the federal banking system.

In 2023, Coinbase hired History Associates Incorporated to help obtain records from the SEC and FDIC. Both agencies denied the requests, leading History Associates to sue them to compel the release of the documents.

"For nearly two years, a wide array of federal financial regulators — including the Securities and Exchange Commission, the FDIC, and the Federal Reserve Board — have used every regulatory tool at their disposal to try to cripple the digital-asset industry," according to the complaint filed against the FDIC. "This FOIA lawsuit seeks to bring to light the FDIC’s role in that unlawful scheme."

In July 2023, History Associates, on behalf of Coinbase, filed a FOIA request with the SEC for documents regarding the agency's views on Ethereum and the status of ETH. The SEC initially denied the request in October 2023, claiming no responsive information could be found. 

However, upon appeal, the SEC acknowledged the existence of the files but stated they were exempt from disclosure. 

History Associates and Coinbase contend that exemptions are not valid and urge the court to mandate the SEC to disclose the requested information. In a related FOIA request that was denied, they sought documents on investigations into Enigma MPC and Etherdelta founder Zachary Coburn, both of whom received cease and desist orders for alleged securities violations.

This is the second time this month that the SEC has faced a lawsuit over its failure to comply with FOIA requests. The American Securities Association previously sued on June 6 to access documents from SEC investigations into record-keeping at major Wall Street firms like Morgan Stanley, JPMorgan, and Goldman Sachs, but was denied as it might compromise ongoing probes and enforcement actions.

Edited by Harshajit Sarmah