Key Takeaways
- Coinbase has sued the SEC and FDIC for regulatory overreach.
- The lawsuits allege the SEC and FDIC failed to comply with FOIA requests.
- Coinbase claims regulators are pressuring banks to deny services to Bitcoin firms.
Coinbase has filed lawsuits against the SEC and FDIC, accusing them of stifling the Bitcoin industry through coordinated efforts to limit access to banking services.
The lawsuits, filed on June 27 in Washington D.C., claim the SEC and FDIC failed to comply with Coinbase’s Freedom of Information Act (FOIA) requests. Coinbase believes these documents would reveal a coordinated effort by regulators to hinder the Bitcoin industry’s banking access.
Coinbase asserts that the SEC and FDIC are pressuring banks to deny accounts and services to Bitcoin firms, likening it to “Operation Choke Point,” an Obama-era initiative targeting high-risk sectors. This alleged regulatory overreach threatens the industry’s financial lifelines and transparency.
Coinbase stated in its complaint:
Regulators are deliberately campaigning to cut Bitcoin companies off from the banking system, posing an existential threat to the industry.
Legal experts warn that FOIA lawsuits face significant challenges due to agencies’ broad discretion over disclosure exemptions, and proving malicious intent by regulators may be difficult. Despite these hurdles, Coinbase is determined to challenge what it sees as regulatory hostility against the Bitcoin sector.
This legal action is part of Coinbase’s ongoing battle with regulators like the SEC, with whom it is already engaged in multiple lawsuits. The exchange continues to defend the Bitcoin industry against what it perceives as an overreach of regulatory power.
Bitcoin advocates echo Coinbase’s concerns, believing that regulators are abusing their authority to slow down technological progress deliberately.
