Coinbase announces lawsuits against SEC, FDIC in Freedom of Information Act dispute

After failing to have Freedom of Information Act (FOIA) requests granted, Coinbase is initiating legal action against the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), the company announced Thursday. 

In 2023, Coinbase hired consultancy firm History Associates Incorporated to assist in retrieving records from the SEC and FDIC. Both requests were denied, History Associates said, and the firm is now suing both agencies in an effort to force them to hand over the documents. 

In both suits, History Associates is the plaintiff, and Coinbase is named as a related party. 

On behalf of Coinbase, History Associates in July 2023 submitted a FOIA request to the SEC. The agency asked for documents relating to the SEC’s “views on Ethereum and the status of ETH,” according to the complaint. 

The SEC in October 2023 denied the request, stating that they were unable to “locate or identify any information responsive to the request,” the complaint states. After History Associates appealed the decision, the SEC later said the files did exist, but they were protected under exemption rules. 

History Associates and Coinbase argue that these exemptions do not apply and the court should require the SEC to release the information. 

In a separate FOIA request, which was also denied, Coinbase and History Associates sought documents relating to any investigation involving Enigma MPC and Etherdelta founder Zachary Coburn. Both parties were served cease and desist orders for alleged securities violations. 

“The SEC’s rationale for withholding documents from investigations that concluded in settlements years ago is tailor-made to frustrate the legitimate purposes for which Coinbase sought the Coburn and Enigma MPC documents in the first place—to understand the view of the law that underlies the SEC’s enforcement blitzkrieg against the digital-asset industry,” the complaint reads. “The SEC’s stonewalling violates its FOIA obligations.” 

Read more: Coinbase moves forward with appeal of SEC’s rulemaking petition denial

In November 2023, History Associates, also at Coinbase’s direction, submitted a FOIA request to the FDIC seeking copies of all so-called “pause letters” the agency sent to supervised financial institutions. The FDIC’s Office of Inspector General confirmed these letters, which asked institutions to “pause all crypto asset-related activities,” existed in an October 2023 report. 

The FDIC denied the FOIA request in January 2024 and again last month after History Associates appealed, the complaint states. Coinbase and History Associates say the agency is in violation of federal disclosure requirements and asks the court to force the FDIC to hand the documents over. 

Coinbase is now involved in three separate legal battles with the SEC. Coinbase sued the securities regulator after the SEC denied Coinbase’s formal petition for rulemaking in 2022. The case is now in the US Court of Appeals for the Third Circuit.

The SEC sued Coinbase in June 2023 for alleged securities violations. Coinbase mostly lost its petition to toss the lawsuit in March, and the case has proceeded to the discovery phase.

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