Coinbase has filed a motion for partial summary judgment in its ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC), seeking access to internal documents that could shed light on the regulator’s enforcement strategy toward the crypto industry.
The legal battle stems from the SEC’s denial of Freedom of Information Act (FOIA) requests from History Associates, which hired Coinbase to clarify the agency’s position on digital assets.
The SEC initially withheld documents under FOIA Exemption 7(A), which protects documents related to law enforcement proceedings. However, the regulator later acknowledged that this exemption may no longer apply, but still insisted on delaying the document review for three years.
According to the filing, the regulator claims that this time is necessary to double-check the documents and see if they contain any documents related to law enforcement proceedings. However, History Associates believes the agency’s delays are not justified.
The SEC’s delays in producing documents have prompted Coinbase to propose a two-pronged approach, prioritizing review of internal SEC communications and addressing third-party data later.
Looking for clarity
The motion in Coinbase’s lawsuit against the SEC seeks clarity on how the regulator applies securities law to crypto companies. The SEC does not have clear rules to define which tokens can be considered securities.
History Associates filed its first FOIA-based request in July 2023, seeking clarity on Ethereum’s (ETH) shift from a blockchain based on proof-of-work consensus to proof-of-stake.
An August 2023 filing also requested documents related to the SEC case against Zachary Coburn, founder of decentralized exchange EtherDelta.
In November 2018, Coburn was charged with operating an unregistered national securities exchange following the SEC’s first enforcement action based on such a finding. The charge was settled with the payment of nearly $400,000 in disgorgement and fines.
This lawsuit is part of Coinbase’s broader efforts to challenge the SEC’s regulatory approach, which the SEC and many others in the industry say is an overreach of authority.
