SEC Seeks Court Dismissal of Coinbase’s Subpoena Request

• SEC urges court to reject Coinbase’s subpoena request for documents on the agency’s internal crypto discussions.
• Coinbase seeks greater transparency from SEC, arguing for public accountability in the crypto regulatory landscape.
• SEC contends Coinbase’s broad document demands lack legal basis, calling them irrelevant to the ongoing court case.

The U.S. Securities and Exchange Commission (SEC) has asked a New York court to reject a subpoena request from Coinbase. This request from the crypto exchange seeks the SEC to release documents related to the agency’s internal discussions on digital assets.

Coinbase believes these documents might reveal crucial insights into the regulatory stance of the SEC regarding cryptocurrencies. However, the SEC argues that Coinbase’s request is for material “entirely irrelevant” to the ongoing court case.

Coinbase has been pressuring the SEC to provide more documents, including internal discussions, which they argue could shed light on the SEC’s enforcement actions against the crypto industry. 

The exchange asserts that greater transparency is necessary, especially when the SEC is pursuing what Coinbase describes as an “unprecedented regulation by enforcement campaign.” Paul Grewal, Coinbase’s Chief Legal Officer, has stated that the least the SEC owes to the public is transparency, emphasizing the need for accountability in regulatory practices.

In a document filed on Monday, the SEC explained that it had already provided Coinbase with access to certain documents, including fair notice documents and investigative files not directly linked to the Coinbase case. 

SEC criticized Coinbase’s request as an attempt to conduct a “sprawling search” across all agency records, including internal files and communications with other government entities. The SEC argued that Coinbase had not provided any legal precedent to justify such broad demands.

Coinbase’s legal team previously attempted to subpoena SEC Chair Gary Gensler, seeking access to his emails. However, U.S. District Judge Katherine Polk Failla rejected this request, citing it as unwarranted. 

The ongoing legal battle stems from the SEC’s lawsuit against Coinbase last year, accusing the exchange of operating as an unregistered securities platform. At the heart of the dispute is whether cryptocurrencies on Coinbase are securities or digital commodities.

SEC maintains that many digital assets offered by platforms like Coinbase are securities, thus subject to regulatory oversight. In contrast, Coinbase argues that these digital assets are commodities and should not fall under the same regulatory framework.