On Thursday, Coinbase’s stock surged over 4%.
The past couple of years have seen multiple actions by the SEC targeting the crypto sector, though recent developments hint at a softening stance. For instance, spot ether exchange-traded funds have emerged without any accusations against the blockchain entity Consensys.
To safeguard its operations, the exchange might contemplate relocating from U.S. jurisdiction.
On Thursday, U.S. financial regulators were confronted with a lawsuit from the crypto platform Coinbase. The accusation? A failure to reveal details of previous inquiries into the digital currency realm and attempts to cut off the sector from essential banking facilities.
Coinbase enlisted the expertise of consultancy History Associates Inc. to bolster its lawsuits filed in the District of Columbia’s U.S. District Court against the SEC and FDIC. The charges suggest these bodies have withheld significant data and neglected Coinbase’s FOIA demands.
The petitions describe a pattern of regulatory behavior as obstructive, running counter to the intended transparency of the FOIA.
Regulatory bodies have allegedly employed diverse methods to hinder the digital currency ecosystem. This includes referencing “pause letters” issued to banks under FDIC oversight, purportedly as part of a larger strategy to isolate digital asset enterprises from banking channels.
Context and Statistics
In April 2023, Coinbase was one of the leading crypto exchanges globally, with millions of users trading on its platform. The company has been at the forefront of several regulatory debates as the crypto industry continues to grow exponentially.
Regulatory Challenges and Litigation Dynamics
The SEC’s persistent lawsuit against Coinbase questions the legality of the exchange’s operations as an unregistered securities platform. The crypto exchange argues that the SEC has neglected to furnish requisite regulatory direction.
Furthermore, the Federal Deposit Insurance Corporation stands accused of exerting pressure on financial institutions, urging them to sever connections with the burgeoning crypto world.