Today (Thursday), Coinbase filed lawsuits against the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). According to a report from FoxBusiness, the lawsuits claim that both agencies failed to fulfill Freedom of Information Act (FOIA) requests submitted to the U.S. District Court for the District of Columbia.

Alleging Regulatory Opacity

The lawsuits from Coinbase allege that the SEC and FDIC neglected to provide requested information under the FOIA, impacting transparency in regulatory dealings. Coinbase accuses the federal agencies of actions perceived as attempting to marginalize the cryptocurrency industry within the banking sector.

BREAKING: 🇺🇸 COINBASE IS SUING THE SEC, ALLEGING REGULATORS ARE TRYING TO CRIPPLE THE CRYPTO INDUSTRY. pic.twitter.com/bD1B1Vny1r

— Bitcoin Magazine (@BitcoinMagazine) June 27, 2024

Specifically, Coinbase's FOIA requests to the SEC aimed to obtain information concerning the agency's stance on Ethereum Ethereum Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Read this Term, particularly its transition to a proof-of-stake (PoS Proof-of-Stake (PoS) Proof-of-stake is a type of consensus algorithm in which a blockchain network aims to achieve distributed consensus. It is also process used to reach an agreement on a single data value. In PoS-based cryptos, the creator of the next block is chosen through various combinations and parameters. In essence, an individual person can mine or validate block transactions based on how many coins he or she holds. Adhering to this concept, the more Bitcoin or altcoin owned by a miner, the greater the mini Proof-of-stake is a type of consensus algorithm in which a blockchain network aims to achieve distributed consensus. It is also process used to reach an agreement on a single data value. In PoS-based cryptos, the creator of the next block is chosen through various combinations and parameters. In essence, an individual person can mine or validate block transactions based on how many coins he or she holds. Adhering to this concept, the more Bitcoin or altcoin owned by a miner, the greater the mini Read this Term) consensus mechanism with Ethereum 2.0.

Additionally, Coinbase sought records related to prior investigations involving individuals such as Zachary Coburn and Enigma MPC, facilitated through its consultant firm, History Associates Inc.

Lawsuit Advances despite Partial Dismissal

Earlier, a federal judge in Manhattan permitted the SEC to continue its lawsuit against Coinbase, as reported by Finance Magnates. While dismissing one claim, the ruling sets the stage for a protracted legal battle. US District Judge Katherine Failla partially granted Coinbase's motion to dismiss the SEC's allegations of securities law violations.

The decision underscores ongoing regulatory challenges faced by digital asset firms. Despite a partial victory for Coinbase, the ruling aligns with the SEC's crypto regulation stance. Coinbase's Chief Legal Officer, Paul Grewal, affirmed readiness to contest SEC claims, expressing confidence in legal arguments.

The lawsuit, initiated in June last year, accuses Coinbase of facilitating unregistered securities trading and operating unlawfully as a securities exchange.

Judge Failla's decision permits most claims to proceed, excluding allegations of unregistered broker activity via Coinbase's wallet app. This legal clash is pivotal in the SEC's efforts to regulate the digital asset market under traditional securities laws.