Coinbase Sues SEC and FDIC Alleging Regulatory Overreach
Coinbase has filed lawsuits against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), alleging attempts to undermine the Bitcoin and cryptocurrency sector.
The lawsuits, submitted on June 27th in the Washington D.C. district court, claim that the SEC and FDIC did not comply with Coinbase's Freedom of Information Act (FOIA) requests. Coinbase asserts that the information sought might reveal coordinated regulatory efforts to limit Bitcoin and cryptocurrency's access to banking services.
In its legal filings, Coinbase alleges that federal regulators are intentionally working to cut Bitcoin and digital asset companies off from the banking system, posing a significant threat to the industry's viability by restricting essential financial resources.
Coinbase points to instances where regulators have pressured banks to deny accounts and services to Bitcoin and cryptocurrency firms, drawing parallels to "Operation Choke Point," an Obama-era initiative aimed at discouraging banks from serving certain "high-risk" industries.
The company contends that regulators are violating transparency laws to conceal the extent of their actions against the Bitcoin and crypto industry. Coinbase aims to expose what it views as regulatory overreach beyond the agencies' authorized powers.
Legal analysts note that FOIA lawsuits often face significant challenges due to the broad discretion agencies have in claiming disclosure exemptions. Additionally, proving that regulators acted with malicious intent may be difficult.
Despite these challenges, Coinbase's lawsuits represent its latest effort to counter regulatory authorities like the SEC, with which it is already involved in multiple legal disputes.
The exchange seeks to protect the Bitcoin and cryptocurrency sector from regulatory actions it believes could threaten the industry's future.