Coinbase has filed a motion to compel the US Securities and Exchange Commission (SEC) to produce crucial documents during discovery. These documents are linked to the token in the regulator’s complaints against the US-based crypto exchange Coinbase.
Paul Grewal, Coinbase’s Chief Legal Officer, stated that the requested documents include the regulator’s consideration of the exchange’s public offering. Additionally, Coinbase seeks statements made by Gary Gensler in personal and professional capacities during his tenure at the SEC.
Documents related to tokens and public offering
According to court filings, SEC commissioners and non-enforcement staff met with crypto market participants. They made public statements on the regulatory status of digital assets before filing a legal action against Coinbase. Coinbase argues that these documents are directly relevant to the SEC’s current claims and are linked to the crypto exchange’s fair notice defense. The commission is reportedly refusing to search for these documents.
Coinbase also seeks to compel the SEC to produce or log protocol for any custodian email searches, including Chair Gensler’s SEC emails related to his public statements on key matters. The SEC has refused this request, citing relevance and burden claims.
SEC’s stance and Coinbase’s arguments
The SEC refuses to produce the requested documents, arguing that the request is irrelevant and burdensome. However, Coinbase highlighted that similar claims in other litigations confirm the existence of relevant documents within the commission, outside of enforcement.
The SEC has accused Coinbase of operating an unregistered securities exchange because several tokens listed on the platform are allegedly securities. The commission also claims that Coinbase’s staking services constitute unregistered securities offerings. Coinbase urged the court to order the SEC to conduct a preliminary search to log relevant documents.
Ongoing legal scrutiny and market impact
Coinbase has faced repeated legal scrutiny from the SEC. However, recent positive court decisions have bolstered Coinbase’s confidence and share price. Over the last six months, COIN price surged by 112%, up by 64% on a year-to-date (YTD) basis, trading at $257.63 in the previous session.
Earlier this year, the SEC launched an investigation into Ethereum 2.0, but the Enforcement Division later closed its probe, suggesting no charges over Ether sales as securities transactions. Recently, the SEC approved nine spot ETH ETF applications, including the conversion of Grayscale’s Ethereum Trust (ETHE) to a spot ETF.
Coinbase’s legal actions highlight the ongoing tensions between crypto exchanges and regulators. The outcome of this case could significantly impact the regulatory landscape for digital assets in the US.