Coinbase News – May 8, 2025: SEC Internal Turmoil Exposed by FOIA as Coinbase Mounts Strong Legal Push
Key Takeaways
- FOIA disclosures reveal internal disputes within the SEC regarding crypto policy, contradicting public enforcement narratives.
- Coinbase’s legal team uncovered 2019 SEC emails acknowledging gaps in digital asset regulation, undermining later claims of clarity.
- The SEC refused to respond in a major Ethereum case, fueling confusion over whether ETH qualifies as a security.
- Coinbase argues that the agency lacks the tech and regulatory tools to police crypto effectively, bolstering industry calls for reform.
- Investors and lawmakers are pressuring the SEC to clarify its position on Ethereum, XRP, and platform responsibility.
FOIA Files Reveal SEC Discord Over Crypto Policy
Coinbase has ignited fresh debate over digital asset regulation by releasing newly acquired emails from the U.S. Securities and Exchange Commission (SEC) via the Freedom of Information Act (FOIA). These internal messages highlight a stark contrast between the SEC’s public posture and behind-the-scenes uncertainty surrounding crypto oversight.
Among the most damaging revelations is a 2019 email from SEC staff acknowledging that there was, in fact, a “regulatory gap” in how the agency handled cryptocurrencies. This directly contradicts the SEC’s more recent enforcement-led stance, where it claims clear jurisdiction over digital assets such as Ethereum and XRP.
Coinbase’s legal team is using the disclosure to build its defense in ongoing litigation, arguing that the agency’s inconsistent internal messaging invalidates its current legal arguments.
A Missed Response on Ethereum That Raised Eyebrows
Further inflaming the debate is Coinbase’s exposure of a 2023 email trail where the New York Attorney General requested the SEC to declare Ethereum a security in an ongoing case against KuCoin. The SEC never responded. That silence has fueled speculation that the agency is unwilling—or unable—to definitively classify ETH under current law.
Legal analysts say this non-response could prove pivotal in multiple ongoing legal challenges, not only involving Coinbase but also affecting Ripple and other entities navigating the uncertain classification of major tokens.
Coinbase is now arguing that this regulatory ambiguity has harmed both innovation and compliance. Without formal declarations, exchanges and developers are left operating in a high-risk vacuum.
Technical Shortcomings Undermine the SEC’s Capabilities
Adding a more embarrassing layer to the dispute is a separate internal SEC email, also surfaced by Coinbase, revealing that the agency was unable to access a basic video file submitted as part of a regulatory review.
The technical mishap, which occurred during a 2023 filing response, showcases what Coinbase describes as an outdated and poorly equipped regulatory body—one struggling to keep pace with the evolution of digital technologies it is meant to govern.
For the crypto community, this has become yet another piece of evidence that the SEC lacks the operational readiness to enforce rules on modern blockchain-based systems.
Industry and Legal Repercussions Could Follow
The broader implications of the FOIA disclosures are already being felt. Coinbase’s findings may bolster bipartisan calls for Congress to establish a comprehensive digital asset framework, one that removes ambiguity and shifts power away from legacy regulators acting beyond their mandate.
Coinbase has positioned itself as the industry’s legal bulwark, and this latest evidence could give its legal team more leverage in its high-profile battles with the SEC and other agencies. If accepted in court, the FOIA emails could undercut the SEC’s future ability to define crypto tokens as securities without Congressional action.
Meanwhile, crypto industry advocates argue this is another example of inconsistent governance stalling innovation in the United States. Several lawmakers have already expressed concern about the SEC’s conduct in private committee briefings.
Final Thoughts
Coinbase’s FOIA exposé lands at a time when regulatory scrutiny of digital assets is at an all-time high. By exposing the SEC’s internal contradictions and procedural gaps, the company is not only strengthening its own legal defense — it’s forcing a national conversation on how the U.S. government should regulate crypto in the years to come.
With lawsuits, lobbying, and legislative bills all in motion, the timing of these revelations may mark a pivotal shift in crypto’s regulatory future — one where transparency and technological readiness must finally meet the moment.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
