Coinbase expects summary judgment in SEC, FDIC case by 2025

Coinbase, the largest crypto exchange in the US, expects a summary judgment briefing in the FOIA lawsuit against the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The exchange anticipates a judgment by 2025.

Coinbase has sued the SEC and FDIC, demanding access to internal documents and communications. The case was filed under the Freedom of Information Act (FOIA) to uncover what Coinbase suspects to be a coordinated effort by regulators to undermine the crypto industry.

SEC and FDIC files replies to Coinbase’s request

Paul Grewal, Chief Legal Officer at Coinbase, in a post, revealed that both the SEC and FDIC had filed their replies regarding the FOIA litigation suits. The legal action seeks transparency from the watchdogs linked to their past investigations and actions around the industry.

Grewal highlighted that the SEC had improperly withheld documents from closed investigations. This includes the Ethereum 2.0 inquiry. On the other hand, the FDIC held back the “pause letters” it sent to banks warning them to stop working with crypto companies.

Coinbase CLO highlighted that both agencies had agreed to the existence of the documents the exchange seeks. However, the regulators are allegedly making false claims that they were within their rights to withhold the documents based on governmental privileges. The SEC in its reply had confirmed that its Ethereum 2.0 investigation is closed, he added.

The crypto exchange had also asked for documents related to two previously settled digital asset cases. This includes one case of Zachary Coburn, the founder of EtherDelta, a platform that the commission labeled in 2018 as dealing in “digital asset securities.” 

We expect that summary judgment briefing will follow (there is no discovery in these cases), before a decision on the merits. That decision will likely come in 2025. We appreciate the Court’s consideration. 3/3

— paulgrewal.eth (@iampaulgrewal) August 8, 2024

Coinbase is expecting a summary judgment briefing to follow before a decision on the merits as there is no discovery process in these cases. Grewal mentioned a decision will likely come in 2025.

Coinbase holding its ground

Coinbase is maintaining a similar stance in other regulatory challenges imposed by the financial regulator. Recently, the SEC filed its response to the exchange’s request to produce crucial docs in the case. Grewal stated that the reply submitted shows the regulator’s inconsistent views of digital assets and its regulatory reach. He stressed that if the SEC is engaging in an unprecedented regulation by-enforcement campaign then the least they owe is transparency to the public.

The exchange shares rose by over 7% to around $192 on Thursday, while, it has seen a surge of 3% in the after-hours trading. The surge comes amid the federal court’s order to Ripple Labs to pay a $125 million penalty in a case brought by the SEC. The court’s decision to impose a much smaller penalty is seen as a positive sign for Coinbase’s ongoing legal battle with the agency.