SEC pushes back against Coinbase's 'overly broad' discovery requests

The United States Securities and Exchange Commission has again pushed back against Coinbase’s request for documents, including private emails from SEC Chair Gary Gensler.

On August 5, the SEC filed a motion in an attempt to deny Coinbase’s effort to access certain documents, including all SEC internal and external emails about the application of securities laws to digital assets.

The SEC argued that Coinbase's discovery requests are overly broad, seeking irrelevant material that is disproportionate to the needs of the case.

The agency claims to have already produced over 240,000 documents and is searching another 117,000 documents for responsive material.

The agency stated that this “additional sweeping discovery,” including all SEC internal and external emails about the application of securities laws to digital assets is “not relevant to the Howey analysis or fair notice defense that will decide the case.”

It also argued that producing three million additional documents was “disproportional” to the requirements of the case.

“The burden of searching and producing or logging, one by one, an additional three million irrelevant external or assuredly privileged internal SEC documents that Coinbase’s limitless request entails is thus entirely disproportional to the needs of the case.”

However, Coinbase chief legal officer Paul Grewal said in a post on X on Aug. 6 that the documents were necessary to show “the record of the SEC’s inconsistent views of digital assets and its own regulatory reach.”

In July, Coinbase filed a motion asking for SEC Chair Gary Gensler’s private communications during his time at the agency as Chair from 2021, among other documents.

Grewal also argued that the agency should provide more transparency to the public.

“If the SEC is going to engage in an unprecedented regulation by enforcement campaign, the least they owe to those they target – and the public – is transparency.”

The SEC stated that it has “more than satisfied its discovery obligations,” and the motion should be denied.

The SEC sued Coinbase in June 2023, accusing the company of violating federal securities laws. It fingered 13 crypto assets that it deemed were securities, alleging that Coinbase operated as an “unregistered securities broker” since 2019.