In a striking revelation that adds fresh perspective to the ongoing crypto regulation saga, Coinbase has released a cache of internal SEC documents obtained through a Freedom of Information Act (FOIA) request—offering a rare look into the regulatory fog surrounding digital assets like Ethereum and XRP.
Among the most eye-opening details? In 2023, the New York Attorney General’s Office attempted—but failed—to secure the SEC’s backing in its legal battle against KuCoin by requesting the Commission declare Ethereum a security.
Behind Closed Doors: What the SEC Was Really Saying
The records, which include emails and internal correspondence, reveal a surprising disconnect: While the SEC was actively pursuing enforcement actions across the crypto space, it was at the same time reluctant to take a definitive stance on the classification of Ethereum.
A June 2023 email from Shamiso Maswoswe, head of the NYAG’s Investor Protection Bureau, requested that the SEC file an amicus brief asserting that Ether should be considered a security. “I think it would be beneficial to investor protection to get a court to hold that Ether is a security,” Maswoswe wrote. The SEC, however, declined to respond with a clear position.
This quiet refusal left New York prosecutors without the regulatory backing they had hoped for in their effort to prosecute KuCoin for allegedly offering unregistered securities.
Regulatory Posturing or Legal Strategy?
What these documents suggest is a deeper conflict between public enforcement actions and private regulatory indecision. Despite headlines filled with lawsuits and crackdowns, the internal SEC discussions paint a more uncertain picture—one where regulators appear hesitant to commit to hard definitions in a rapidly evolving digital asset landscape.
Coinbase’s FOIA findings also reveal past communications with Ripple Labs, reflecting long-standing friction between the agency and crypto companies over how U.S. securities laws should be applied to blockchain tokens.
A Moment of Transparency in an Opaque Regulatory Era
For Coinbase, which has been vocal about the need for regulatory clarity in the U.S., these documents bolster its argument that the SEC’s approach has been inconsistent and opaque. The timing is notable, as the exchange—and the broader crypto industry—continue to push for clearer rules amid a backdrop of high-profile litigation and shifting policy narratives.
As crypto adoption grows and traditional legal frameworks struggle to keep up, this glimpse into the inner workings of regulatory decision-making may be the clearest sign yet that U.S. crypto policy remains very much a work in progress.
