Coinbase Wins Partial Victory in SEC Case, Gains Access to Key Documents

• A New York judge approved Coinbase’s request for the SEC to produce certain documents.
• The judge denied the motion to subpoena the SEC chair, Gary Gensler.
• Coinbase’s chief legal officer is optimistic about the recent ruling.

A New York judge has granted Coinbase’s request for the SEC to hand over specific documents related to the tokens involved in the lawsuit against the crypto exchange. However, the judge rejected the motion to subpoena SEC Chair Gary Gensler.

In a September 5 ruling, US District Judge Katherine Polk Failla granted part of Coinbase’s “motion to compel,” ordering “huge discovery into internal memorandum and other documents reflecting the SEC’s Howey analysis,” according to Coinbase’s chief legal officer, Paul Grewal.

SEC’s Lawsuit and Coinbase’s Response

The SEC sued Coinbase last year, accusing the crypto exchange of operating an unregistered business. Coinbase’s initial response was to ask for a dismissal of the lawsuit, a move that the court denied, launching the case into its current discovery process. Following the denial of Coinbase’s “motion to dismiss,” the crypto exchange moved the “motion to compel” as its method of continuing with the case, leading to the recent partial approval by the court.

Notably, the crypto exchange’s motion to compel requested Gensler to produce documents concerning his private emails relevant to the ongoing case, including statements from 2017, four years before Gensler’s swearing-in as the SEC chair. The judge denied this request. According to Grewal, Coinbase withdrew the subpoena request based on representations made by the SEC’s counsel to Judge Failla.

Judge Orders The SEC to Provide More Witnesses

The judge also instructed the SEC to provide more staff members as witnesses beyond the initial five proposed, though not the full number Coinbase requested. Coinbase had asked the SEC to conduct a preliminary search on non-enforcement files and provide a hit report, arguing this would strengthen their defense against the SEC’s claims. This request encompassed reports from top SEC leadership and current and former SEC commissioners.

Grewal was optimistic about the judge’s recent ruling, noting that the order would enable Coinbase to access essential documents that could aid their defense. According to Grewal, the exchange met its target despite withdrawing the case. He noted that the judge’s order granted the heart of the discovery that Coinbase had been seeking for months.