In a recent letter to a district court judge, Coinbase argued that the SEC Chair’s private communications are an appropriate source of discovery.
United States crypto exchange Coinbase is pushing to access Gary Gensler’s communications, arguing they are crucial for its ongoing legal battle with the financial regulator.
Coinbase first requested these communications in April, stating they were relevant to its case. This includes any documents about cryptocurrency from 2017 onwards.
On June 28, the Securities and Exchange Commission (SEC) tried to block Coinbase’s request, telling District Court Judge Katherine Failla that it “rejected this position and proposal.”
In a letter filed on July 3, Coinbase challenged the SEC’s stance, arguing that Gensler’s communications about the regulatory status of digital assets and crypto exchanges are central to Coinbase’s “fair notice defense.”
Coinbase lawyers claim Gensler’s personal communications are crucial for their case. (Source: CourtListener)
“Mr. Gensler has purported to share his views and communicate with market participants at times expressly in his personal capacity,” wrote Coinbase, adding that this was “all the more reason” to probe his private messages.
“The SEC does not, and cannot, argue that during his tenure as Chair Mr. Gensler never communicated about these matters with market participants by personal email […] Instead, they simply refuse to ask.”
Additionally, the lawyers stated that Gensler’s communications were equally important during his time as SEC Chair and before his tenure. These communications would help them better understand his thinking on regulatory matters over time.
“We have responded to [the SEC’s] effort to block reasonable discovery from Mr. Gensler in a case that it—not Coinbase—chose to file,” wrote Coinbase Chief Legal Officer Paul Grewal.
Source: Paul Grewal
The SEC sued Coinbase in June 2023, accusing the crypto exchange of violating federal securities laws by listing 13 tokens it claims are securities. The SEC also alleges that Coinbase has operated as an “unregistered securities broker” since 2019, nearly two years before its initial public offering in April 2021.
Coinbase argues that the tokens listed on its exchange shouldn’t be considered securities, claiming they fall outside of SEC regulations.
Chi Do is a Vietnam-based freelance crypto journalist. She is most interested in how blockchain technology and cryptocurrencies will disrupt the traditional financial system.
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