- Coinbase has filed a motion demanding the SEC, especially Chairman Gary Gensler, to produce key documents crucial for its defense
- The motion claims the SEC has previously engaged with crypto market stakeholders and provided regulatory guidance
- Coinbase has accused the SEC of refusing to search for and produce relevant documents and failing to log privileged ones
Coinbase has filed a motion demanding the US Securities and Exchange Commission (SEC) produce key documents essential to its defense against regulatory charges, with a particular focus on Chairman Gary Gensler. The motion, submitted on Tuesday in the US Southern District Court of New York, claims that before initiating legal action, the SEC had engaged with cryptocurrency market stakeholders and provided guidance on crypto regulation. However, Coinbase now accuses the SEC of refusing to search for and produce documents related to this guidance, as well as failing to log privileged documents as required.
Second Time Lucky for Coinbase?
Coinbase recently lost a push to subpoena its Gensler, demanding access to his personal communications, with Judge Katherine Failla blocked this at the SEC’s request, calling the arguments supporting it “fatutous.” She did, however, allow Coinbase to file a motion to compel so that its arguments could be explored further, which it now seems to have done.
The exchange, which is being sued by the SEC over the alleged sale of unregistered securities, argues that the SEC “refuses to search any documents outside of a self-selected group of Enforcement Division investigatory files” because documents outside its investigatory files are irrelevant and that searching for them would be burdensome. The agency is also refusing to log documents on the grounds of privilege.
In contrast, Coinbase contends that these documents are crucial for its defense, criticizing the SEC for not substantiating its burden claims and asserting that many requested documents involve communications with token issuers and market participants, which should not be privileged.
Three Key Areas
The motion emphasizes three specific document requests:
- Documents Outside the Enforcement Division: Coinbase seeks documents from other SEC divisions, such as FinHub and Corporation Finance, and from commissioners, arguing their relevance to the SEC’s claims and Coinbase’s fair notice defense.
- Public Offering Documents: Coinbase requests documents related to its public offering to demonstrate that the SEC did not previously consider its operations to be in violation of securities laws.
- Chair Gensler’s Communications: Coinbase seeks communications from SEC Chair Gary Gensler, including those made in his personal capacity, to clarify the SEC’s public statements and regulatory stance on digital assets.
Coinbase describes the SEC’s position as “untenable” and urges the court to compel the SEC to conduct thorough searches and produce or log the requested documents.
In June 2023, the SEC charged Coinbase with operating an unregistered securities exchange, broker, and clearing agency, alleging that its staking services constitute unregistered securities offerings. Coinbase is disputing these allegations, arguing that the SEC lacks the congressional authority to regulate digital assets and that Coinbase did not receive fair notice of any violations.
