TLDR
Coinbase has filed a motion to compel the SEC to produce documents, including Gary Gensler’s private communications during his time as SEC Chair.
The company argues these documents are critical for its defense against SEC allegations of operating as an unregistered securities exchange.
Coinbase is seeking information on SEC conversations with other market participants and documents related to its 2021 public offering.
The SEC has refused to search for documents outside its Enforcement Division, citing lack of relevance and undue burden.
This motion is part of Coinbase’s ongoing legal battle with the SEC, which sued the company in June 2023.
Cryptocurrency exchange Coinbase has taken a new step in its legal fight against the U.S. Securities and Exchange Commission (SEC). The company has filed a motion to compel the SEC to produce documents it believes are crucial for its defense.
The motion, filed in the U.S. Southern District Court of New York, asks for several types of documents. These include private communications from SEC Chair Gary Gensler during his time at the SEC, which began in 2021.
Coinbase also wants information about conversations SEC staff had with other market participants, and documents related to Coinbase’s 2021 public offering.
This legal action is part of a larger conflict between Coinbase and the SEC. In June 2023, the SEC sued Coinbase. The regulator accused the company of operating as an unregistered securities exchange since 2019.
The SEC also claimed that Coinbase allowed illegal trading of unregistered securities on its platform.
Coinbase argues that the requested documents are important for its defense. The company believes these materials could show that the SEC didn’t previously consider Coinbase’s operations to be breaking securities laws. Coinbase also thinks the documents could support its claim that it didn’t receive fair warning about any violations.
Paul Grewal, Coinbase’s chief legal officer, explained the company’s position on social media. He said, “We’re entitled to know all the cards the other side has.” Grewal added that Coinbase isn’t trying to play “Texas Hold ‘Em with all the cards face down.”
Today we are asking the Court to order @SECGov to produce important documents in discovery, including documents related to the tokens the SEC included in its complaint against @coinbase, the SEC’s consideration of our public offering, and statements Chair Gensler has made in his…
— paulgrewal.eth (@iampaulgrewal) July 23, 2024
However, the SEC has pushed back against these requests. The regulator says it won’t search for documents outside of its Enforcement Division’s investigative files. The SEC claims these other documents aren’t relevant and that searching for them would be too much work.
Coinbase disagrees with the SEC’s stance. In its motion, the company called the SEC’s position “untenable.” Coinbase wants the court to make the SEC do thorough searches and either produce the requested documents or explain why they can’t be shared.
This latest move by Coinbase is a narrowed version of an earlier request. In April, the company had asked for Gensler’s private communications from before he became SEC Chair. After some pushback, Coinbase has now limited its request to Gensler’s communications during his time as Chair.
The conflict between Coinbase and the SEC is part of a broader debate about how cryptocurrencies should be regulated. Coinbase argues that the SEC doesn’t have the authority from Congress to regulate digital assets. The company also says it didn’t get fair notice that it might be breaking any rules.
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