SEC Opposes Coinbase’s 3 Million Document Discovery Request

• The SEC filed a motion to block Coinbase’s discovery request, calling it irrelevant and excessive.
• Coinbase demands nearly three million additional documents, which the SEC argues are disproportionate and unnecessary.
• Coinbase’s Chief Legal Officer defends the request, emphasizing the need for transparency in the SEC’s regulatory approach.

The U.S. Securities and Exchange Commission (SEC) has moved to block Coinbase’s discovery request. This move comes after Coinbase demanded internal communications from SEC Chair Gary Gensler. 

SEC Pushes Back Against Coinbase’s Demands

The SEC filed a motion on August 5, arguing that Coinbase’s request is irrelevant and excessive. The regulator claims that Coinbase is overreaching by asking for a broad array of documents. The SEC describes the demand as disproportionate and unnecessary for the case.

The SEC criticized Coinbase’s request for being overly broad, including internal and external emails related to digital asset regulation. The agency argues that Coinbase’s demand for nearly three million additional documents is excessive. These documents, the SEC claims, will not help resolve the central issues of the case.

SEC’s Compliance with Coinbase’s Demands

The SEC stated that it has already produced over 240,000 documents and is reviewing another 117,000 for relevant material. The agency insists that the additional documents requested by Coinbase are irrelevant to the Howey test or fair notice defense, which are crucial to the case’s outcome.

The SEC expressed concerns about the undue burden of producing such a large volume of material. An excerpt from the recent filing states, “The burden of searching, producing, or logging an additional three million documents is vastly disproportionate to the needs of the case.”

In response, Coinbase’s Chief Legal Officer Paul Grewal defended the request. Grewal argued that obtaining these documents is essential to prove the SEC’s inconsistencies regarding digital assets and its regulatory approach. He emphasized the need for transparency in light of the SEC’s “regulation by enforcement” strategy.

Coinbase Stand on Transparency

Grewal shared his views on social media, saying, “If the SEC is going to engage in an unmatched regulation by enforcement campaign, the least they owe to those they target – and the public – is transparency.”