24/7 Cryptocurrency News

CLO Demands Relief From Court Citing SEC Refusal To Produce Full Records

Published

4 months ago

August 12, 2024

In the latest development on the Coinbase Vs SEC lawsuit, the crypto exchange has filed a motion demanding relief from the court. CLO Paul Grewal cited the SEC’s refusal to produce full records as a major obstacle in the ongoing legal battle with the U.S. Securities and Exchange Commission. The exchange claims that the inconsistent regulatory approach towards digital assets and the SEC’s refusal to release essential documents, including emails of Gary Gensler, are impacting the fairness of the case.

Coinbase Vs SEC Case: Exchange Urges Court Relief

The latest filing in Coinbase Vs SEC battle comes as a response to what it believes to be the US SEC’s unfair and “inconsistent” regulatory tactics. The exchange argues that the agency is deliberately refusing to provide the documents that are crucial for the case.

Notably, the crucial documents include communications from SEC Commissioners and staff outside the Enforcement Division, particularly those involved with the digital asset regulations. The crypto exchange claims that these documents are crucial to understanding the SEC’s stance on digital assets and how they apply securities laws to them.

In addition, the crypto giant also challenges the regulatory reluctance to search for specific custodians who might have relevant information. Despite the initial refusal from the US SEC, Coinbase provided evidence that these documents exist and are crucial to the case.

On the other hand, the agency’s refusal to log and review non-enforcement documents has further fueled the exchange’s frustration. The exchange argues that it is a violation of the previous court order. In addition, it argues that without access to these documents, the exchange cannot challenge the SEC’s privilege assertions or mount a fair defense.

US SEC’s Defense Stance

In an August 5 filing, the US SEC continued defending its decision to hold back certain documents, arguing that the exchange’s discovery requests are overly broad and irrelevant to the case. In addition, it also accused the crypto giant of engaging in a “fishing expedition” and has cited Federal Rule of Civil Procedure 26(b)(1) to support its stance. The agency further claims that the requested documents do not meet the relevance and proportionality criteria required by the rule.

The SEC also took issue with the exchange’s fair notice defense, which argues that the crypto regulations lack clarity. The agency has dismissed this defense as insufficient to justify the exchange’s sweeping discovery requests. Besides, the regulatory body refused to examine SEC Chair Gary Gensler’s personal emails for relevant communications, despite the exchange’s insistence that these records could provide crucial insights.

Meanwhile, as the Coinbase Vs SEC battle intensifies, the exchange has also challenged a recent SEC proposal to broaden the definition of “exchange” to include Decentralized Exchanges (DEXs). Grewal, in a recent X post, criticized the proposal, arguing that it lacked critical analysis and would have severe consequences for the crypto industry.

With both sides entrenched in their positions, the Coinbase vs. SEC lawsuit has gained notable traction lately. With the latest conclusion in the Ripple Vs SEC lawsuit, the market is now keeping a close watch on this legal battle, which may have a significant impact on the US crypto regulation.