Key Takeaways:
- Coinbase is pressing the SEC for expansive access to internal communications, including those of Chair Gary Gensler
- SEC has strongly opposed these subpoena requests, describing them as excessively broad and invasive.
In a significant escalation of its legal battle with the U.S. Securities and Exchange Commission (SEC), Coinbase is pressing the regulatory agency for access to internal communications, including those of SEC Chair Gary Gensler.
However, the SEC has fiercely opposed these expansive subpoena requests, describing them as excessively broad and invasive.
Coinbase’s aggressive legal strategy aims to subpoena the SEC and its employees for documents and communications that could support its defense in the looming trial against the regulatory body.
These requests, which the SEC has labeled as “breathtakingly broad,” seek virtually all documents related to cryptocurrency. In court documents filed on August 5, SEC lawyers argued that Coinbase’s demands are excessive and intrusive.
The SEC’s latest filing represents a robust pushback against Coinbase’s expansive legal maneuvers. The regulatory agency criticized the crypto exchange for attempting to conduct a sprawling search of all agency records, including internal files and communications with government agencies and market participants.
The SEC asserted that Coinbase failed to provide any former cases or legal principles to support its “extraordinary” requests.
The SEC filed civil charges against Coinbase last year, accusing the crypto exchange of operating as an unregistered securities exchange, broker, and clearing agency. Additionally, the SEC charged Coinbase with the unregistered sale of securities related to its staking products.
Coinbase’s legal team hopes that the requested communications and records could bolster their defense against these allegations.
In a related development, Coinbase has faced allegations of violating Federal Election Commission (FEC) laws regarding its $25 million donation to Fairshake Super PAC. Critics, including digital asset commentator Molly White and Public Citizen, claim that Coinbase breached election campaign finance laws.
Coinbase Chief Legal Officer Paul Grewal responded by clarifying that the payments to the exchange were derived from the sale of assets forfeited to the Department of Justice (DOJ) Assets Forfeiture Fund, not from Congressionally appropriated funds.
Grewal emphasized that these assets came from collapsed cryptocurrency exchange FTX and the Silk Road platform, and thus should not be classified under Congressional appropriations.
He also pointed out that Coinbase’s political contributions have been bipartisan, with donations to both Democratic and Republican super PACs for the 2024 elections.
