Coinbase submitted Litigation The Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC)Federal Deposit Insurance Corporation), accused authorities of trying to undermine the cryptocurrency industry.
BREAKING: 🇺🇸 COINBASE is suing the SEC, claiming the regulator is trying to undermine the cryptocurrency industry. pic.twitter.com/bD1B1Vny1r
— Bitcoin Magazine (@BitcoinMagazine) June 27, 2024
The lawsuit, filed June 27 in District Court in Washington, D.C., states: The SEC The FDIC did not respond to Coinbase’s Freedom of Information Act (FOIA) request, which Coinbase said could reveal a concerted effort by regulators to restrict cryptocurrency access to banking services.
In its complaint, Coinbase alleges that federal regulators are waging a campaign to intentionally cut off bitcoin and cryptocurrency companies from the banking system, posing an existential threat to the industry by cutting off a vital financial lifeline.
Coinbase noted that regulators are pressuring banks to deny accounts and services to bitcoin and cryptocurrency companies, calling this “a step forward.”Chokepoint OperationThe move was an Obama-era initiative designed to encourage banks to avoid doing business with certain “high-risk” sectors.
The exchange claims that regulators are violating transparency laws to hide the full extent of their crypto crackdown. Coinbase is seeking to expose regulatory overreach, arguing that regulators are going far beyond their authority.
But legal experts warn that FOIA lawsuits face an uphill battle, given agency discretion over which information to exempt. Proving bad faith on the part of regulators could also be difficult.
Still, the lawsuit is Coinbase’s latest counterattack against regulators such as the SEC, who are already engaged in multiple legal battles as the exchange defends bitcoin and the cryptocurrency industry against regulatory hostility that threatens its survival.
Coinbase’s accusations have resonated with bitcoin and cryptocurrency advocates who believe regulators are abusing their power to deliberately slow the technology’s progress.
