Coinbase Pursues Legal Intervention Against SEC for Withholding Vital Documents
Coinbase has intensified its legal battle with the U.S. Securities and Exchange Commission (SEC) by filing a motion seeking court intervention, alleging that the SEC’s regulatory practices are both unjust and inconsistent. Paul Grewal, the Chief Legal Officer of Coinbase, emphasized that the SEC’s refusal to provide essential documents, including emails from SEC Chair Gary Gensler, is undermining the integrity of the ongoing proceedings.
The cryptocurrency exchange asserts that these documents—particularly communications from SEC Commissioners and staff members outside the Enforcement Division—are vital for comprehending the SEC’s position on digital assets. Coinbase claims that the SEC’s unwillingness to identify specific custodians and its failure to log and review non-enforcement documents contravene a previous court ruling. This situation has hindered Coinbase’s ability to effectively challenge the SEC’s claims of privilege or mount a robust defense.
In its defense, the SEC, in an August 5 filing, characterized Coinbase’s discovery requests as overly expansive and irrelevant to the case at hand. The regulatory agency also took issue with Coinbase’s fair notice defense, which argues that the regulatory framework surrounding cryptocurrency is ambiguous.
In addition, Coinbase has voiced its opposition to a recent SEC proposal aimed at broadening the definition of “exchange” to encompass Decentralized Exchanges (DEXs). The firm contends that the proposal lacks thorough analysis and could lead to significant repercussions for the cryptocurrency sector. As the litigation between Coinbase and the SEC advances, it is anticipated to have a substantial impact on the future of U.S. cryptocurrency regulation.
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