Coinbase’s attempt to subpoena SEC chair Gary Gensler criticized by judge Coinbase’s attempt to subpoena SEC chair Gary Gensler criticized by judge
The company seeks to obtain Gensler's communications for its fair notice defense.
2 min read
Updated: Jul. 12, 2024 at 12:14 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Judge Katherine Polk Failla criticized Coinbase’s attempts to subpoena SEC chair Gary Gensler in the SEC’s ongoing case against the firm.
At a July 11 hearing recounted by Inner City Press, Failla noted that Coinbase’s request included Gensler’s statements before he became SEC chair in 2021.
Coinbase’s lawyer explained that the company seeks Gensler’s earliest comments because the SEC did not confirm that Gensler did not use his personal devices or email accounts to discuss crypto or communicate with market participants.
Failla said that the company would have difficulty obtaining Gensler’s pre-chair statements, adding that she finds Coinbase’s arguments “speculative” and not persuasive.
Despite her criticism, Failla acknowledged Coinbase’s concerns. She said:
“It does trouble me if you’ve been stonewalled.”
The judge added that she expects future motions from Coinbase and will be present.
SEC calls request ‘intrusive’
SEC lawyer Jorge Tenreiro called Coinbase’s request “incredibly intrusive” against a public official, noting that proceedings concern the SEC’s actions, not Gensler’s.
Additionally, Tenreiro asserted that Gensler is not a fact witness or expert witness on the law and urged the court to quash Coinbase’s subpoena request.
Failla agreed with the first point, noting her “strong views about the disproportionate burden of inquiry” into Gensler’s pre-chair statements.
Coinbase lawyers noted that, in the SEC’s case against Ripple, the court ordered the discovery of multiple custodians, including then-SEC chair Jay Clayton.
Tenreiro responded with a filing in which the SEC sought to prohibit Ripple from obtaining certain information, including by searching SEC staff’s personal devices.
Coinbase requested subpoena in June
In June, Coinbase asked for documents and communications concerning Gensler’s public comments on digital assets, platforms, and staking as a service, including government, television, public appearances, and interviews.
The request covered statements from May 2021 and September 2023 alongside Gensler’s abovementioned pre-chair communications.
Coinbase’s filing includes 33 other requests for documents and communications concerning the SEC, in addition to its various demands around Gensler. On June 28, the SEC asked the court to quash the subpoena against Gensler in a personal capacity.
On July 3, Coinbase responded that Gensler’s personal communications are relevant to its defense for several reasons — especially its fair notice defense, as the SEC chair’s past statements would impact whether the company could reasonably expect the SEC to take action against it.
The SEC began its lawsuit against Coinbase in June 2023, alleging the firm operated as an unregistered exchange, broker, and clearing agency. The regulator also said that Coinbase engaged in unregistered offerings and sales of securities by offering staking-as-a-service.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Ripple
Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.