Coinbase has filed a motion for partial summary judgment in its ongoing lawsuit against the US Securities and Exchange Commission (SEC), seeking access to internal documents that could shed light on the regulator’s enforcement strategy toward the crypto industry.
The legal battle stems from the SEC’s denial of requests based on the Freedom of Information Act (FOIA) by History Associates, which Coinbase hired to clarify the agency’s stance on digital assets.
The SEC initially withheld documents under FOIA Exemption 7(A), which protects records tied to law enforcement proceedings. However, the regulator later acknowledged that this exemption might no longer apply but still insisted on delaying document review for three years.
According to the filing, the regulator claims that this time is necessary to check the documents once more and see if any of them carry records tied to law enforcement proceedings. However, History Associates believes the agency’s delays are unjustified.
The SEC’s delays in producing documents have prompted Coinbase to propose a two-track approach, prioritizing the review of internal SEC communications while addressing third-party records later.
Seeking clarity
The motion request in Coinbase’s lawsuit against the SEC seeks clarity on how the regulator applies securities laws to crypto companies. The SEC does not have clear rules to define what tokens could be deemed securities.
History Associates filed its first FOIA-based request on July 2023, seeking clarity over Ethereum’s (ETH) shift from a blockchain based on proof-of-work consensus to proof-of-stake.
A filing form from August 2023 also requested documents related to the SEC case against Zachary Coburn, founder of the decentralized exchange EtherDelta.
In November 2018, Coburn was charged with running an unregistered national securities exchange on the SEC’s first enforcement action based on such a finding. The charges were settled with the payment of nearly $400,000 in disgorgement and penalties.
This lawsuit is part of Coinbase’s broader effort to challenge the SEC’s regulatory approach, which it and many others in the industry believe is an overreach of authority.
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