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Maria Hover
Maria Hover

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Coinbase Accuses U.S. Regulators of Improperly Blocking Crypto Regulation Documents

Cryptocurrency exchange Coinbase has accused the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) of improperly blocking its requests for documents related to crypto regulations.

According to the latest reports, Coinbase, through an intermediary firm called History Associates, has filed lawsuits against both the SEC and FDIC in the U.S. District Court for the District of Columbia. The lawsuits allege that the regulators have failed to provide documents requested under the Freedom of Information Act (FOIA) that could shed light on their approaches to cryptocurrency oversight.

At the SEC, Coinbase is seeking written communications from three closed cases involving how the agency determined which digital assets should be classified as securities, including the status of Ethereum's ether (ETH) token. The company argues that the SEC has improperly denied these requests, citing an exemption that protects law enforcement efforts.

Coinbase is particularly interested in the SEC's recent conclusion of its review of "Ethereum 2.0" as a potential security, as this could complicate the agency's ability to withhold documents on the grounds of an ongoing enforcement matter.

Additionally, Coinbase is seeking copies of the "pause letters" that the FDIC's inspector general said were sent to financial firms, advising them to halt crypto-related activities. The company argues that these letters are part of a "deliberate and concerted effort" by regulators to pressure banks into cutting off digital asset firms from the banking system.

Coinbase's chief legal officer, Paul Grewal, has expressed frustration with the regulators' lack of transparency, stating that the company is "advocating for transparency from our federal government."

The lawsuits come amid ongoing tensions between Coinbase and U.S. financial regulators. The company is currently embroiled in a high-profile legal battle with the SEC over allegations that it is operating an illegal exchange that trades unregistered securities.

Coinbase has a history of challenging government entities in court, having previously backed a lawsuit against the U.S. Treasury Department over sanctions on the crypto mixer Tornado Cash, though that effort was ultimately unsuccessful.

The latest legal actions by Coinbase underscore the crypto industry's broader concerns about what they term "Operation Choke Point 2.0," where financial regulators are allegedly using various means to impede or deny banking services to digital asset firms.

By seeking greater transparency from the SEC and FDIC, Coinbase hopes to gain insights into the regulators' decision-making processes and the rationale behind their enforcement actions against the crypto industry. The outcome of these lawsuits could have significant implications for the future of cryptocurrency regulation in the United States.

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