Coinbase Releases Internal SEC Documents Exposing Conflicting Communications on ETH and XRP

Coinbase has released documents obtained through FOIA requests, exposing conflicting internal communications within the US Securities and Exchange Commission (SEC).

Coinbase has released a trove of documents obtained through FOIA requests, exposing striking contradictions in internal communications within the US Securities and Exchange Commission (PE) regarding crypto regulation.

These findings, part of Coinbase’s broader legal battle against the SEC, shed new light on the agency’s stance on Ethereum and XRP, and highlight technical shortcomings encountered by the commission.

Coinbase Highlights SEC Crypto Policy Gaps

In its latest move to counter the SEC in pending lawsuits, Coinbase has disclosed internal SEC communications that acknowledge a regulatory gap in the crypto space—an assertion the commission has maintained throughout cases against crypto firms.

A 2019 email from SEC staff confirms internal awareness of this gap, which stands in contrast to the commission’s current approach focused largely on enforcement actions to fill perceived regulatory gaps.

This contradiction has sparked questions about the agency’s consistency in regulatory strategy and how it provides legal advice to government units.

Additionally, Coinbase is using these documents to reinforce its argument that the SEC’s actions lack a clear legal foundation. The exchange claims that the commission’s internal positions appear to shift, which undermines the legitimacy of the SEC’s legal actions against crypto entities.

These revelations have brought fresh concerns about the transparency of the SEC’s crypto policy. Coinbase argues that the agency’s stance hinders efforts to create responsible frameworks for digital asset compliance.

The lack of a unified regulatory approach from the SEC has left the crypto sector without reliable guidance, which is a central point in Coinbase’s defense against the SEC’s lawsuit.

SEC Ignored Key Ethereum Legal Request

Coinbase has also uncovered an email from the New York Attorney General’s Office to the SEC in 2023. In this email, the AG’s office asked the SEC to submit an amicus brief on their behalf in the KuCoin case.

The AG’s office is arguing in that case that ETH is a security, and they asked the SEC to submit a brief to the court in support of that contention. However, Coinbase pointed out that the SEC did not respond to the request.

This silence from the SEC contributes to the ongoing confusion over Ethereum’s regulatory classification.

Coinbase highlighted that the agency’s lack of response to the NYAG’s request will likely further complicate matters for the commission. The FOIA documents show the SEC in an instance where it chose not to offer legal clarity in a key proceeding concerning a global crypto platform.

Such actions, according to Coinbase, have raised more questions than answers about the agency’s broader strategic intent. The email from the NYAG’s office suggests there was some internal hesitation within the SEC at that time, which conflicts with the SEC’s broader posture of being an active enforcer in crypto cases.

Coinbase also exposed a surprising internal email detailing the SEC’s technical difficulties. In 2023 alone, the commission could not open a video file that Coinbase submitted as part of a formal response to the SEC during a regulatory escalation.

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