Coinbase, one of the largest cryptocurrency exchanges in the U.S., filed a motion in a District of Columbia Court requesting a partial summary judgement in its lawsuit against the U.S. Securities and Exchange Commission (SEC). The lawsuit seeks access to internal SEC documents related to the regulatory body’s enforcement actions against the cryptocurrency industry, particularly digital assets.
🚨NEW: This morning @coinbase filed a motion in a DC court asking a judge to grant a partial summary judgment in its lawsuit suing the @SECGov to gain access to internal documents relating to #crypto enforcement.
Coinbase lawyers say the SEC has been stonewalling its attempts to…
— Eleanor Terrett (@EleanorTerrett) October 15, 2024
The crypto exchanges legal team alleges that the SEC has been intentionally delaying the release of these documents, despite multiple attempts by Coinbase to obtain them through the Freedom of Information Act (FOIA). According to the exchange, the SEC has requested a three-year grace period to review whether the documents can be released.
Coinbase vs. SEC: The Struggle for Transparency
Coinbase’s motion for partial summary judgement follows months of friction between the exchange and the SEC over the latter’s handling of crypto-related regulations. The motion specifically targets the SEC’s refusal to disclose records related to its enforcement strategy against digital asset companies. Coinbase argues that these records are critical to understanding the SEC’s current stance on how securities laws apply to cryptocurrency.
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According to Coinbase’s attorneys, the SEC’s stance has been inconsistent, and the agency has failed to provide clear guidance on how firms operating in the digital asset space should comply with securities regulations. This lack of clarity, combined with aggressive enforcement actions, has left firms like Coinbase navigating unclear and shifting regulatory waters.
The Delayed Review
The SEC has invoked Exemption 7(A) in its defense, a provision that allows the agency to withhold documents if their release could interfere with ongoing law enforcement proceedings have concluded.
The SEC is delaying the release of the documents related to its enforcement, citing a potential three-year review process. Coinbase is pushing back arguing that further delays are unnecessary, especially since the documents may no longer be sensitive. This isn’t the first time the SEC has been accused of stonewalling similar cases, like History Associate, Inc v. SEC, have raised concerns about the agency’s handling of FOIA request.
Coinbase’s legal team asserts that prolonged delays undermine the purpose of the Freedom of Information Act (FOIA) which aims to promote transparency and timely process to government records. The company is seeking court ruling to force the SSEC to release the documents more quickly, potentially marking a significant development in the battle between the SEC and the crypto industry.
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