Coinbase is trying to obtain records of SEC Chairman Gary Gensler’s communications to support its fair notice defense. However, this attempt was rejected by Judge Katherine Polk Failla at a hearing on July 11. At the hearing, Judge Failla pointed out that Coinbase’s request was unreasonable because it included statements made by Gensler even before he became SEC Chairman in 2021.

Coinbase’s legal team argued that they needed Gensler’s comments quickly because there was no evidence that Gensler had not used a personal device or email account to discuss cryptocurrencies or communicate with market participants. This argument is intended to prove that the SEC may have taken a certain position on Coinbase that may have been influenced by Gensler’s personal opinions.

However, Judge Failla expressed doubts, believing that Coinbase's claims were based on speculation and that it did not provide sufficient evidence to support its request. She made it clear that obtaining Gensler's pre-employment statements would be a difficult task for Coinbase and believed that Coinbase's request was not directly related to the case.

Nonetheless, Judge Failla also showed sympathy for the predicament faced by Coinbase, saying she would be troubled if Coinbase’s request was denied in its entirety, suggesting that the judge took into account the unique circumstances of the case and the company’s rights while adhering to legal procedures.

SEC opposes Coinbase subpoena request

Meanwhile, Jorge Tenreiro, a lawyer for the U.S. Securities and Exchange Commission (SEC), strongly opposed Coinbase's subpoena request for SEC Chairman Gary Gensler's communication records, arguing that this action is intrusive to public officials. Tenreiro made it clear in court that the lawsuit should focus on the actions of the SEC as an institution, not Gensler's personal actions. He further pointed out that Gensler was neither a fact witness nor an expert witness in the case, so Coinbase's request was unreasonable and urged the court to dismiss it.

Judge Katherine Polk Failla explicitly opposed the investigation burden that Gensler's pre-employment statement could trigger, arguing that the scale and depth of such an investigation would be disproportionate. However, Coinbase's lawyers countered that in the SEC's case against Ripple, the court had ordered searches of several SEC officials, including then-SEC Chairman Jay Clayton, indicating that there is precedent for obtaining SEC officials' communication records in certain circumstances.

In response, Tenreiro filed a document in which the SEC attempted to restrict Ripple’s access to certain information, including searches of SEC staff’s personal devices. This shows that the SEC has a firm stance on protecting the privacy interests of its officials, while also trying to balance the line between regulatory responsibilities and personal privacy.

Coinbase Requests Subpoena for Key Documents and Communications

In June 2024, Coinbase took legal action and issued a subpoena to SEC Chairman Gary Gensler, requesting him to provide public comments, documents and communication records related to digital assets, platforms and pledge services. These materials include Gensler’s government statements, TV appearances, public speeches and interviews on different occasions, spanning from May 2021 to September 2023, and even including his communications before he became SEC Chairman.

Coinbase’s request is extensive, involving 33 SEC-related document and communication requests, as well as multiple requests for Gensler personally. This move was opposed by the SEC on June 28, and the SEC asked the court to revoke the subpoena against Gensler personally, arguing that it was too invasive and irrelevant to the case.

However, Coinbase maintained in its July 3 response that Gensler’s personal communications are essential to the company’s defense, particularly as it relates to the fair notice defense. Coinbase claims that Gensler’s past public comments could have influenced whether the company could have reasonably foreseen the SEC’s action, which is essential to the company’s legal position and strategy.

It is reported that the background of this legal battle is the lawsuit filed by the SEC against Coinbase in June 2023. The SEC accused Coinbase of operating as an exchange, broker and clearing agency without registration, and engaging in unregistered securities issuance and sales activities through its pledge services. Coinbase's subpoena request is part of its active defense in this lawsuit, aimed at revealing the SEC's decision-making process and factors that may affect its regulatory actions.

Conclusion:

The legal dispute between Coinbase and the SEC highlights the strained relationship between the cryptocurrency industry and regulators. Coinbase's attempt to bolster its defense by obtaining records of communications from SEC Chairman Gary Gensler reflects the company's concerns about the SEC's possible preconceived position. However, dissenting opinions from Judge Katherine Polk Failla and SEC attorney Jorge Tenreiro emphasized the protection of public officials' privacy and independence from regulators' actions. This lawsuit not only involves the future of Coinbase, but may also have a far-reaching impact on the regulatory environment for the entire cryptocurrency industry.

While Coinbase’s request faces procedural challenges, it reveals the company’s commitment to a fair trial and transparency. At the same time, the SEC’s position demonstrates the importance regulators place on keeping internal communications confidential while performing their duties. As litigation continues, all stakeholders will be looking forward to a solution that balances innovation, privacy, and regulatory needs. Ultimately, this case could become a key precedent in shaping the regulatory framework for cryptocurrencies and protecting investor rights. #Coinbase #SEC #GaryGensler #Legal Proceedings #监管框架