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The U.S. Securities and Exchange Commission complained to a federal judge that Coinbase tried to dig too deep when it went after the records of agency Chair Gary Gensler.
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The SEC made the latest filing in the court case in which the regulator is pursuing the U.S. exchange for violating securities laws.
Lawyers for the U.S. Securities and Exchange Commission (SEC) are pushing back against what they describe as Coinbase’s “breathtakingly broad” subpoena requests searching for “essentially all documents that in any way relate to crypto.”
The court documents , filed Monday, are the latest jab in the ongoing fight between the SEC and Coinbase over the crypto exchange’s attempt to subpoena the agency and its employees, including Chair Gary Gensler, for communications and other records that could potentially be useful for Coinbase’s defense in its upcoming trial against the regulatory agency.
The SEC filed civil charges against Coinbase last year, accusing the crypto exchange of operating as an unregistered securities exchange, broker and clearing agency. The SEC also charged Coinbase with the unregistered sale of securities in connection with its staking products.
In April, Coinbase served the SEC with its first request for the production of documents. Two months later, Coinbase told the SEC that it also planned to subpoena Gensler’s personal communications related to crypto over the course of his tenure, plus four years before he was appointed Chairman. Coinbase also served a similar subpoena on Massachusetts Institute of Technology (MIT), where Gensler taught a class on blockchain technology before joining the SEC. However, the company recently informed the court that it wouldn't seek records from outside his agency role.
Read More: Coinbase Narrows Demand for SEC Chair Gensler's Crypto Messages
The request for Gensler’s personal communications appears to have been a bridge too far for the SEC, which has described the subpoena as a “blatant impropriety.” In a letter to the court on June 28, the SEC argued that the judge overseeing the case, District Judge Katherine Polk Failla of the Southern District of New York (SDNY), should reject Coinbase’s request.
Failla called for a pre-trial conference, held by phone on July 11, to discuss the competing requests. From the outset, Failla appeared to be bewildered by Coinbase’s request for Gensler’s personal communications, particularly those predating his appointment as SEC Chairman.
“I was kind of surprised and not in a good way,” Failla said of Coinbase’s motion on July 11. “I found the arguments, at least as articulated in the July 3rd response, to border on the fatuous… I was not moved by basically any of the arguments.”
Failla sent Coinbase back to the drawing board, ordering its lawyers to file a motion to compel as a starting point for the parties to work through the discovery dispute. Following the conference, Coinbase submitted its motion to compel to the court on July 23, slightly narrowing the scope of its request but otherwise sticking to its guns.
"If the SEC is going to engage in an unprecedented regulation by enforcement campaign, the least they owe to those they – and the public – is transparency," said Coinbase Chief Legal Officer Paul Grewal in a X post.
UPDATE (August 6, 2024 at 13:39 UTC): Adds comment from Paul Grewal.