Coinbase, one of the largest cryptocurrency exchanges in the United States, has escalated its legal battle against the US Securities and Exchange Commission (SEC) with a new court filing to the U.S. District Judge Katherine Failla. As per the filing, the exchange has pushed back against the SEC’s allegations concerning its Freedom of Information Act (FOIA) case.
Coinbase Request Transparency from the SEC
The dispute arises from Coinbase’s request for transparency from the SEC, seeking clarity on the regulatory agency’s stance on digital assets. Coinbase argues that the SEC has been inconsistent and opaque in its communications and enforcement actions related to cryptocurrencies. As part of its efforts to obtain information, Coinbase indicated it might explore Gensler’s personal files to better understand the agency’s internal deliberations and decision-making processes.
However, the SEC contends that such a move is unnecessary and a diversion from the main issue at hand. The agency argues that Coinbase’s FOIA request should be limited to official records and communications, rather than delving into the personal files of its chair. Coinbase, on the other hand, believes that examining Gensler’s personal files could reveal significant insights into the SEC’s regulatory approach and potential biases.
Coinbase Indicts FDIC and SEC Over Denied FOIA Requests
In 2023, Coinbase employed the services of consultancy firm History Associates Incorporated to help file the FOIA requests. These services will help retrieve records from the Securities and Exchange Commission and the Federal Deposit Insurance Corporation (FDIC). Coinbase asked for the agency’s thoughts on Ethereum (ETH) in the FOIA requests to the SEC. Unfortunately, the requests were outrightly denied.
In response to this denial, the exchange decided to indict both agencies, forcing them to hand over the documents in their possession. Also, the American cryptocurrency exchange has asked the court to mandate both agencies to comply with its request in two separate lawsuits.
Meanwhile, at the beginning of the month, Coinbase submitted a filing with the U.S. Court of Appeals, accusing the SEC of aiming to “choke” the burgeoning digital asset industry.
Coinbase’s Legal Saga
Last year, the industry spectated over the Coinbase vs SEC lawsuit. This case was centered on regulatory issues in the cryptocurrency industry which raised clarifying questions about whether tokens sold on Coinbase are securities. The trading platform was displeased with the Judge’s decision to continue with the case, so an interlocutory response was filed to challenge the decision.
On April 26, the crypto lawyer John Deaton filed an amicus brief to support the motion on behalf of Coinbase’s 4,701 customers. Amid the legal saga, Coinbase made a great comeback in the first quarter of 2024 that surpassed its 2023 entire earnings. It saw a boost in the market as it served as a custodian for many of the launched spot Bitcoin (BTC) exchange-traded funds (ETFs).
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