TL; DR
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Coinbase is suing the SEC, claiming that it and the FDIC failed to comply with Coinbase Freedom of Information Act requests, in a deliberate attempt to cut off crypto companies from the banking system.
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You know how Al Capone was imprisoned, not for the estimated hundreds of deaths he ordered, but for tax evasion?
(Serious).
From the outside, it was a strange legal strategy – but it worked!
The same goes for Coinbase’s new case against the SEC.
From the crypto industry’s perspective, the SEC has been very opaque about its enforcement – refusing to explain how it categorizes a range of cryptocurrencies and blockchain products before charging companies with securities fraud for selling them.
(I.e. not sharing the rules of the game and then suing people for not following them).
…but that’s a difficult case to argue (and win) in court.
So Coinbase is doing what the government did to Capone and finding a solution by claiming that the SEC and FDIC failed to comply with Coinbase’s Freedom of Information Act (FOIA) requests.
Requests that would have given them a better understanding of the rules the SEC wanted them to play.
But it is still unclear whether this approach will work.
Legal experts have been quick to note that FOIA lawsuits are an uphill battle, as most government agencies have broad exemptions from disclosure.
At the end of the day – win, lose or draw – it’s just nice to see some adversity.