TLDR
- Coinbase obtained SEC emails through FOIA that show internal conflicts on crypto regulation.
- A 2019 SEC email acknowledged a regulatory gap despite the agency’s public denial of such a gap.
- Coinbase argued that these contradictions weaken the SEC’s legal position on crypto enforcement.
- The SEC did not respond to a 2023 request to declare Ethereum a security in the KuCoin case.
- This silence added to the confusion over Ethereum’s regulatory status.
Coinbase has released documents obtained through FOIA requests, exposing conflicting internal communications within the US Securities and Exchange Commission (SEC). The findings challenge the SEC’s public position on crypto regulation, including Ethereum and XRP, and reveal technical shortcomings. These documents clarify Coinbase’s ongoing legal disputes and underline the digital asset industry’s regulatory inconsistencies.
Coinbase Exposes SEC Crypto Policy Gaps
Coinbase disclosed internal SEC communications that acknowledge a regulatory gap in the crypto space, despite later public denials. A 2019 email from SEC staff confirmed internal awareness of the gap, which contradicts the commission’s current enforcement-driven approach. This contradiction has intensified questions around the agency’s regulatory consistency and legal interpretations.
– 2019 SEC email acknowledging the “crypto regulatory gap,” years before the SEC argued that there was no such gap.
– 2023 email from the NYAG’s Office asking the SEC to submit an amicus brief in their KuCoin case arguing that ETH is a security. Rather than clear that up, SEC… pic.twitter.com/BMgkdSS5Q3— paulgrewal.eth (@iampaulgrewal) May 7, 2025
Additionally, Coinbase has used these documents to reinforce its argument that the SEC’s actions lack a clear legal foundation. The exchange maintains that inconsistent internal positions weaken the legitimacy of the SEC’s legal actions against crypto entities. These revelations have raised fresh concerns about the transparency of the SEC’s crypto policy.
Coinbase argues that the agency’s stance complicates efforts to create responsible frameworks for digital asset compliance. The absence of a unified regulatory approach has left the crypto sector without reliable guidance. This regulatory gap, supported by FOIA findings, forms a core element of Coinbase’s current legal defense.
SEC Ignored Key Ethereum Legal Request
Coinbase also uncovered an email showing the New York Attorney General’s request for SEC input in the KuCoin case. In 2023, the Attorney General asked the SEC to support a claim that Ethereum is a security, but the SEC did not respond. This silence has contributed to confusion over Ethereum’s regulatory classification.
Coinbase highlighted that the agency’s lack of response further complicates its credibility regarding the security status of major cryptocurrencies. The FOIA documents show that the SEC avoided offering legal clarity in a key proceeding involving a global crypto platform. Such actions have raised more questions than answers about the agency’s strategic intent.
The email revealed by Coinbase suggests internal hesitation, which conflicts with the SEC’s broader enforcement posture in the crypto space. Coinbase emphasized that such inaction reflects an unclear regulatory direction pattern.
Coinbase also exposed a surprising internal email detailing the SEC’s technical difficulties in reviewing video evidence. In 2023, the commission could not open a video file Coinbase submitted during a formal response process.
The email revealed that the SEC had trouble accessing key files during regulatory escalation. Coinbase used this incident to argue that the agency is ill-equipped to manage the pace of technology in the crypto space. This point adds weight to Coinbase’s broader critique of the SEC’s institutional preparedness.
