Coinbase Refines Subpoena Strategy, Narrowing Focus to SEC Chair Gensler’s Tenure

Cryptocurrency exchange Coinbase has refined its approach to subpoenaing SEC Chair Gary Gensler’s communications. The company now focuses solely on Gensler’s tenure as SEC Chair, abandoning its initial request for pre-chairmanship records.

Coinbase Narrows Subpoena Request

Coinbase’s legal team filed a document on July 15, revealing a refinement in their subpoena request. The exchange will now “seek the production of Mr. Gensler’s documents only for the period of his tenure as Chair of the SEC,” which began in April 2021.

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This adjustment comes after Judge Katherine Polk Failla expressed skepticism about Coinbase’s original request during a hearing on July 11. The judge voiced “strong views about the disproportionate burden of inquiry into Mr. Gensler’s statements before he became chair.”

Initially, Coinbase sought access to Gensler’s communications dating back to 2017, arguing it was crucial to understanding the evolution of his views on crypto regulation. The exchange claimed these records were an “appropriate source of discovery” for their defense against the SEC’s lawsuit.

SEC Lawsuit and Coinbase’s Defense

The SEC sued Coinbase in June 2023, accusing the exchange of operating as an “unregistered securities broker” since 2019 and listing 13 tokens it considers securities. Coinbase maintains that the tokens on its platform should not be classified as securities and fall outside SEC regulations.

Coinbase’s lawyers argue that access to Gensler’s communications is vital for their defense. They claim Gensler is “uniquely situated as a prominent voice on crypto’s regulatory status” and have accused the SEC of obstructing their attempts to access potentially crucial information.

Judge Failla has set a timeline for the next phase of this dispute. Coinbase must file its opening brief for the motion to compel by July 23, while the SEC has until August 5 to respond.

The judge’s earlier comments suggest Coinbase may face an uphill battle in obtaining Gensler’s communications, even with Coinbase’s refined subpoena strategy. However, by focusing on Gensler’s time as SEC Chair, Coinbase hopes to strengthen its case and address the court’s concerns about proportionality and relevance.

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