oinbase Chief Legal Officer Paul Grewal took to social media to announce that the cryptocurrency exchange had filed lawsuits against two of the United States' most powerful financial regulators - the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The legal action, brought under the Freedom of Information Act (FOIA), aims to obtain regulatory documents and communications held by these agencies about investigations and decisions impacting the digital asset space.
Lack of Clarity from the SEC
In the lawsuit targeting the SEC, Coinbase highlights the commission's failure to provide clear and consistent rules for crypto asset classification and exchange operations. While the SEC declared that Ether is not a security, it has since engaged in expanding enforcement actions without modifying existing statutes or issuing fresh guidance. The case seeks documents on closed SEC probes, including Ether, to understand the regulatory rationale behind these decisions.
Pressure on Banks Hurts Innovation
Additionally, Coinbase's action against the FDIC alleges that the corporation pressured financial institutions into cutting ties and limiting services to cryptocurrency businesses. Criticized internally for this approach, the FDIC is accused of blocking innovation without justification or transparency. Coinbase demands disclosure of related communications that instructed banks to curb dealings with the crypto sector.
Pathway to Transparency
Filed in a federal court, the lawsuits argue the agencies have violated public access rights under FOIA. Represented by specialists in such requests, Coinbase ultimately aims to establish a reasonable regulatory framework through transparency and consistency from its watchdogs. As the digital asset industry rapidly grows in scale and impact, the outcome of these cases could shape the future of crypto regulation and oversight in the United States.
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