The largest US-based crypto exchange by trading volume is suing two of the country’s top financial regulators in a new lawsuit.
In a lawsuit filed today in Washington DC, Coinbase accuses the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) of trying to ‘cripple’ the crypto industry.
“For years, the SEC has refused to articulate a consistent or coherent position on the application of securities laws to digital assets.
The agency’s latest position – that it has sweeping control over the vibrant and fast-growing digital asset industry – has no basis in securities law and has never been coherently explained by the agency. Instead, the SEC has waged an enforcement war against digital asset companies that, combined with other financial regulators’ efforts to debank crypto companies, is intended to cripple the digital asset industry.”
In the lawsuit, Coinbase describes the SEC’s classification of certain cryptos as securities as “unsuitable.”
“It has not explained the contradictory testimonies of its chairman, who had announced for barely three years ago that the agency lacks the authority to regulate digital asset exchanges like Coinbase. It has refused to change its rules to make them workable for digital asset companies. And it has argued that it doesn’t even have to allow the $2 trillion digital asset industry to comply with its existing rules.”
Coinbase also claims that the SEC failed to comply with its Freedom of Information Act (FOIA) requests.
“In an effort to enforce FOIA scrutiny of administrative opacity, Coinbase has asked SEC history claimants to provide details of three SEC investigations into digital asset companies and entrepreneurs – including aim to find out how the SEC views its new, drastic and illegal activities. authority.
One of those investigations focused on Ether – the digital asset used in Ethereum – which the SEC publicly announced in 2018 was not a security. That investigation was recently closed by the agency, and the other two investigations have been closed for years. Yet the SEC withheld nearly all responsive data, based on standard claims that these cold cases might be related to some unspecified, ongoing investigations. These denials violated the SEC’s FOIA obligations.”
Earlier this month, Coinbase Chief Legal Officer Paul Grewal described the SEC as “determined to stifle the crypto industry.”
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