Coinbase, the largest cryptocurrency exchange in the US, has filed a lawsuit against two of the country’s top financial regulators, the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The exchange accuses the regulators of attempting to cripple the crypto industry.
According to Coinbase, the SEC has failed to provide a consistent and coherent view on how securities laws apply to digital assets. The agency’s recent position, claiming sweeping authority over the digital asset industry, is baseless and unexplained. Coinbase argues that the SEC’s enforcement actions against digital asset firms, combined with efforts by other financial regulators to de-bank crypto firms, are aimed at destroying the industry.
In the lawsuit, Coinbase challenges the SEC’s classification of certain cryptocurrencies as securities, calling it inappropriate. The exchange points out the contradictory congressional testimony by the SEC Chair, who previously stated that the agency lacks the authority to regulate digital asset exchanges like Coinbase. Coinbase also criticizes the SEC for refusing to modify its rules to accommodate digital asset firms and for not allowing the industry to comply with existing regulations.
Coinbase further accuses the SEC of failing to comply with its Freedom of Information Act (FOIA) requests. The exchange had sought information regarding three SEC investigations into digital asset firms and entrepreneurs. Despite the closure of two of these investigations and the SEC’s public announcement that Ether (the digital asset used in Ethereum) is not a security, the agency withheld most of the requested records, citing ongoing investigations.
Earlier this month, Coinbase’s chief legal officer, Paul Grewal, described the SEC as determined to stifle the growth of the crypto industry.
Disclaimer: The opinions expressed in this article are not investment advice. Investors should conduct their own research before making high-risk investments in Bitcoin, cryptocurrency, or digital assets. Transfers and trades are undertaken at the individual’s own risk, and any resulting losses are their responsibility. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, nor does it provide investment advice. Please note that The Daily Hodl engages in affiliate marketing.
