Key takeaways:
In an attempt to subpoena US SEC Chair Gary Gensler, Coinbase has changed strategy and is now only requesting his personal correspondence while he is the Chair.
Judge Falia, however, expressed her strong opinions over the excessive “burden of inquiry into Mr. Gensler’s statements” before to his appointment as chair.
In an attempt to subpoena US Securities and Exchange Commission (SEC) Chair Gary Gensler, the crypto exchange Coinbase has changed its strategy and is now only requesting personal correspondence from the Chair.
The company’s lawyers first argued that access to Gensler’s private chats, both prior to and during his tenure as SEC Chair, was a “appropriate source of discovery” that would support their case when the securities regulator sued Coinbase.
However, following Judge Katherine Polk Failla’s unwillingness to grant Coinbase’s request last week, Coinbase has indicated in a July 15 filing that it will now pursue access to Gensler’s correspondence while serving as SEC Chair:
“With respect to the subpoena to Mr. Gensler, Coinbase has determined to seek the production of Mr. Gensler’s documents only for the period of his tenure as Chair of the SEC.”
Coinbase first requested access to Gensler’s correspondence from 2017, the year before Gensler began lecturing on “Blockchain and Money” at the Massachusetts Institute of Technology. Gensler was appointed SEC Chair in April 2021.
Coinbase contended that access to Gensler’s private conversations was essential to comprehending how his opinions on regulations pertaining to crypto had evolved over time.
Judge Falia, however, expressed her strong opinions over the excessive “burden of inquiry into Mr. Gensler’s statements” before to his appointment as chair.
The SEC has until August 5 to submit a response, and Coinbase has until July 23 to submit its opening brief in support of its move to compel.
The SEC filed a lawsuit against Coinbase in June 2023, claiming that the exchange had broken federal securities laws by listing thirteen tokens that it claimed to be securities and that Coinbase had been conducting business as a “unregistered securities broker” since 2019—nearly two years prior to its April 2021 IPO.
Coinbase contends that the tokens that are offered on its exchange are not securities and so are exempt from SEC oversight.
