Coinbase Says SEC is Refusing to Cough Up Documents Critical for its Defense

Coinbase has filed a motion to compel the U.S. Securities and Exchange Commission, specifically targeting Chairman Gary Gensler, to produce documents deemed critical to its defense against the regulator.

In a motion filed in the U.S. Southern District Court of New York on Tuesday, Coinbase claims that in the years before taking legal action, the SEC said it had met with crypto market stakeholders and provided guidance around crypto regulation. 

Coinbase argues that the SEC is now refusing to search for and provide documents to the SEC's guidance while also not logging privileged documents as required.

“The SEC will not search for these relevant documents,” Coinbase’s motion reads. “It refuses to search any documents outside of a self-selected group of Enforcement Division investigatory files.”

The SEC maintains that documents outside its investigatory files are irrelevant and that searching for them would be burdensome. The SEC is also refusing to log documents on the grounds of privilege.

Coinbase, however, argues that these documents are essential for its defense, criticizing the SEC for not substantiating its burden claims and asserting that many requested documents involve communications with token issuers and market participants, which should not be privileged.

The motion highlights three specific document requests:

1. Documents Outside the Enforcement Division: Coinbase seeks documents from other SEC divisions (e.g., FinHub, Corporation Finance) and commissioners, asserting their relevance to the SEC’s claims and Coinbase’s fair notice defense.
2. Public Offering Documents: Coinbase requests documents related to its public offering to demonstrate that the SEC did not previously consider its operations to be in violation of securities laws.
3. Chair Gensler's Communications: Coinbase seeks communications from SEC Chair Gary Gensler, including those made in his personal capacity, to clarify the SEC's public statements and regulatory stance on digital assets.

Coinbase describes the SEC’s position as "untenable" and is urging the court to compel the SEC to conduct thorough searches and produce or log the requested documents.

In June 2023, the SEC charged Coinbase with operating an unregistered securities exchange, broker, and clearing agency and alleged that its staking services constitute unregistered securities offerings. 

Coinbase is disputing these allegations, asserting that the SEC lacks the congressional authority to regulate digital assets and that Coinbase did not receive fair notice of any violations.

A spokesperson for the SEC declined to comment, and Coinbase has not yet responded to a request for a statement.

Edited by Sebastian Sinclair