A federal judge overseeing the US Securities and Exchange Commission (SEC) case against Coinbase suggested that the cryptocurrency exchange may be unable to inquire into Gary Gensler’s private communications before he led the commission.
In a July 11 hearing in the US District Court for the Southern District of New York, Coinbase lawyers argued they should be able to view data on Gensler’s personal devices after the SEC provided no explicit assurances on his communications with market makers. The SEC’s legal team asked Judge Katherine Polk Failla to quash the subpoena into Gensler’s personal communications, as the chair was “not a fact witness” and “not an expert witness on the law” in the Coinbase case.
“We’re unable to get information from the SEC,” said Coinbase lawyers, according to reporting from Inner City Press. “The time period before, we included because we tried to engage with Mr. Gensler and the SEC, but they’ve refused to say he didn’t use his personal device to communicate about crypto.”
Judge Failla said she didn’t necessarily agree with Coinbase’s arguments but agreed to listen to them, adding she had “strong views about the disproportionate burden of inquiry into Mr. Gensler’s statements before he became chair.” She asked both parties to file letters with the court by July 15.
Related: SEC will not pursue enforcement action against Paxos
The subpoena for the SEC chair’s personal devices was part of discovery in the commission’s enforcement case against Coinbase filed in June 2023. The regulator alleged that Coinbase operated as an “unregistered securities broker” since 2019, violating US securities laws.
Coinbase initially requested Gensler produce communications from his personal devices in April, later claiming he had “share[d] his views and communicate[d] with market participants at times expressly in his personal capacity.” The discovery request targeted communications and documents concerning the SEC chair’s opinions on crypto starting in 2017.
Magazine: Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower