Coinbase Fights SEC's Attempt to Block Access to Gensler's Documents

The legal fight between Coinbase and the Securities and Exchange Commission (SEC) took an unexpected turn recently. Coinbase is pushing back against the SEC’s efforts to prevent access to documents from SEC Chair Gary Gensler.

This move is part of Coinbase’s ongoing battle with the SEC over crypto regulation. On July 3, Coinbase sent a letter to US District Judge Katherine Failla. The company argued that Gensler’s insights could significantly impact the case. They believe his communications about crypto and exchanges during his time as chair are crucial for their defense.

Coinbase’s top lawyer, Paul Grewal, shared the company’s stance on X. He said that since the SEC started the lawsuit, not Coinbase, they shouldn’t block reasonable requests for information from Gensler. Grewal wrote, “Democracy, as well as due process, dies in darkness. We appreciate the Court’s careful look at this issue.”

Last week, Coinbase sued the SEC and the Federal Deposit Insurance Corporation (FDIC). They claim these agencies aren’t following Freedom of Information Act (FOIA) requests, and Coinbase wants to force them to release the requested information.

The main issue is Coinbase’s request for Gensler’s communications. These could reveal his thoughts on regulating digital assets. On June 14, Coinbase gave Gensler a subpoena asking for documents related to the lawsuit.

Coinbase Seeks Gensler’s Emails in SEC Dispute

Despite several meetings, the SEC says it doesn’t represent Gensler personally and won’t provide the documents. The SEC also hasn’t said if Gensler has any relevant communications in his capacity, as he hasn’t looked for such documents.

Coinbase told the judge that Gensler’s email was a “proper source of discovery.” They argue that Gensler’s extensive background and public statements have significantly shaped people’s understanding of crypto regulation.

Before leading the SEC, Gensler had an impressive career. He led the Commodity Futures Trading Commission (CFTC) and taught about blockchain and financial regulation at MIT.

Coinbase also mentioned the Ripple case in its filing. In that case, the Court said documents don’t need to be public to show how the public understands regulatory requirements. It accepts that agency staff’s interactions with market participants and inter-agency messages are relevant to the fair notice defense.

As this clash continues, Coinbase keeps pushing for transparency and accountability from the SEC, especially Gensler. The result of this case could significantly affect how the crypto industry is regulated in the future.

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