SEC files motion pushing back against Coinbase’s discovery requests SEC files motion pushing back against Coinbase’s discovery requests
The watchdog maintains that it has more than fulfilled its discovery obligations and calls for Coinbase's motion to be denied, labeling it an unjustified and burdensome demand.
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Updated: Aug. 7, 2024 at 12:10 am UTC
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The US Securities and Exchange Commission (SEC) has firmly opposed Coinbase’s motion to compel additional discovery in their ongoing legal battle.
The dispute centers around Coinbase’s sweeping demands for documents that the SEC argues are irrelevant and overly burdensome.
In a memorandum filed on Aug. 5, the SEC contended that the exchange’s discovery requests seek vast amounts of information, much of which is either irrelevant to the core issues of the case or privileged.
SEC arguments
The SEC outlined several key points against Coinbase’s motion. Firstly, the SEC asserts that the documents the exchange seeks are not relevant to the primary issues of the case, arguing that the court’s analysis of the facts and the law, not the SEC’s internal discussions, will decide the case.
Secondly, the SEC highlighted the significant burden involved in reviewing and producing millions of documents. It noted that it has already spent over 400 hours reviewing documents and preparing a 648-page privilege log. Expanding the search to include millions of additional documents would be excessively burdensome.
The SEC also disputed Coinbase’s fair notice defense, stating that the law’s application to digital assets is clear and that internal SEC communications are irrelevant to this objective legal standard.
Additionally, Coinbase’s request for a sample of SEC Chair Gary Gensler’s emails is particularly contentious. The SEC argued that this request is disingenuous and burdensome, especially since Gensler has testified under oath that he does not use personal devices for SEC business.
Court’s role
The SEC’s memorandum emphasized the Court’s role in determining the relevance and proportionality of discovery requests. The regulator stated that proper discovery should be focused on what the defendant did, emphasizing that the scope of discovery should be tailored to the specific facts and legal questions at issue.
As the legal battle between the SEC and Coinbase continues, the court’s decision on this discovery dispute will play a crucial role in shaping the proceedings. The watchdog maintains that it has more than fulfilled its discovery obligations and calls for Coinbase’s motion to be denied, labeling it an unjustified and burdensome demand.
As both sides prepare for further legal confrontations, the broader cryptocurrency industry and legal observers are closely watching the developments, which could set important precedents for the future of digital asset regulation in the US.
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Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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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.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.