Sec urges ny court to reject coinbase’s expansive subpoena request

SEC Urges NY Court to Reject Coinbase’s Expansive Subpoena Request

Last Updated: August 6, 2024By

Attorneys representing the U.S. Securities and Exchange Commission (SEC) have challenged what they characterize as Coinbase’s “astonishingly extensive” subpoena requests, which seek “virtually all documents connected to cryptocurrency.”

The court filings submitted on Monday mark the latest maneuver in the ongoing legal skirmish between the SEC and Coinbase. The crypto exchange is attempting to subpoena the agency and its personnel, including Chair Gary Gensler, for communications and records potentially beneficial to Coinbase’s defense in its forthcoming trial against the regulatory body.

The SEC initiated civil litigation against Coinbase last year, accusing the platform of functioning as an unregistered securities exchange, broker, and clearinghouse. Additionally, the SEC charged Coinbase with the unauthorized sale of securities related to its staking products.

In April, Coinbase issued its initial request for document production to the SEC. Two months later, Coinbase announced plans to subpoena Gensler’s personal communications about cryptocurrency during his tenure and the four years preceding his chairmanship. Coinbase also targeted the Massachusetts Institute of Technology (MIT) with a similar subpoena, where Gensler had taught a blockchain technology course before joining the SEC. However, Coinbase recently informed the court it would not seek records beyond Gensler’s official role.

The demand for Gensler’s personal communications appears to have crossed a line for the SEC, which labeled the subpoena a “flagrant impropriety.” In a June 28 letter to the court, the SEC urged District Judge Katherine Polk Failla of the Southern District of New York (SDNY) to deny Coinbase’s request.

Judge Failla convened a pre-trial telephonic conference on July 11 to address the conflicting demands. She expressed surprise and concern over Coinbase’s request for Gensler’s personal communications, especially those preceding his SEC appointment.

“I was somewhat taken aback and not positively,” Failla remarked regarding Coinbase’s motion on July 11. “The arguments presented, as articulated in the July 3rd response, seemed almost ludicrous… I was not persuaded by essentially any of the points raised.”

Judge Failla instructed Coinbase to refine its approach, directing its attorneys to file a motion to compel as a preliminary step in resolving the discovery dispute. Following the conference, Coinbase submitted its motion to compel on July 23, slightly narrowing the scope of its request but maintaining its primary stance.

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About the Author: Eunji Lim

Eunji lim