TL;DR
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Coinbase is suing the SEC, alleging it and FDIC failed to comply with Coinbase’s Freedom of Information Act requests, in a deliberate attempt to cut crypto companies off from the banking system.
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You know how Al Capone was locked up, not for the estimated hundreds of deaths he ordered, but for tax evasion?
(Seriously).
From the outside looking in, it was a weirdly roundabout legal strategy — but it worked!
Same thing goes for Coinbase’s new case against the SEC.
From the crypto industry’s perspective, the SEC has been wildly opaque about it’s enforcement — refusing to state how it categorizes a range of cryptocurrencies and blockchain products, before charging companies with securities fraud for selling them.
(I.e. not sharing the rules of the game, then suing folks for not playing by them).
…but that’s a hard case to argue (and win) in court.
So Coinbase is doing what the government did to Capone, and finding a workaround, alleging the SEC and FDIC failed to comply with Coinbase’s Freedom of Information Act (FOIA) requests.
Requests that would have given them a better understanding of the rules that the SEC wanted them to play by.
But whether or not this approach will work is still muddy.
Legal experts have been quick to note that FOIA lawsuits are an uphill battle, given most government agencies have broad disclosure exemptions.
At the end of the day — win, lose, or draw — it’s just nice to see some pushback.
