In a key development, a New York judge has partially granted Coinbase’s request to access certain documents in its legal dispute with the U.S. Securities and Exchange Commission (SEC). The judge, Katherine Polk Failla, ruled that Coinbase could obtain documents relevant to its defense but denied the company’s attempt to subpoena SEC Chairman Gary Gensler for testimony.
The SEC initiated the case in 2023 and states that Coinbase has been operating as an unregistered exchange. Coinbase has dismissed those claims and taken the matter to the discovery stage, asking for information on how the SEC distinguishes tokens as securities. In this Ruling, Judge Failla allows Coinbase to inspect documents relating to the Howey Test, a legal test to determine whether an asset such as a token is a security. However, the request is limited, and the SEC does not need to produce internal papers if external schedules are attached.
Unfortunately, the court refused to provide Coinbase access to subpoena Gensler’s communications, which the company deemed pertinent to the case. At first, Coinbase asked for Gensler’s views on cryptocurrencies from 2017 onwards but then amended the request to cover statements made at the SEC only. The court stated that this was irrelevant to the particular case.
Coinbase Legal Officer Sees Win as Court Orders Key SEC Documents
Paul Grewal, Coinbase’s Chief Legal Officer, also sounded positive. He said that despite certain restrictions that the court placed, the verdict was indeed in favor of the firm to a certain extent. To support this argument, Grewal said that the court compelled the SEC to produce important records that might help in Coinbase’s defense.
The legal standoff between the SEC and Coinbase has been ongoing since the SEC sued the company, arguing that it had not registered its platform. Although Coinbase withdrew the request for Gensler’s personal communications, this decision allowed Coinbase to proceed with the company’s discovery materials.
The case is likely to proceed in this manner as both sides gather evidence. However, the fallout will have considerable consequences for the future of regulating cryptocurrency platforms in the United States.
