Coinbase Narrows Demand for SEC Chair Gensler’s Crypto Messages

Coinbase
Inc.
(COIN)
is
going
after
internal
chatter
at
the
U.S.
Securities
and
Exchange
Commission
(SEC)
that
may
shed
light
on
its
pursuit
of
cryptocurrency
exchanges
as
illegal
enterprises
–
including
Chair
Gary
Gensler’s
own
communications
–
but
the
scope
of
its
latest
request
filed
on
Tuesday
has
been
dialed
back
after
resistance
from
a
federal
judge.

The
company
heard

the
message
from
Judge
Katherine
Polk
Failla,
of
the
District
Court
for
the
Southern
District
of
New
York,
that
she
thought
Coinbase
was
going
too
far
in
its
demands
for
years
of
communications
from
the
SEC
chief
that
included
messages
before
he
showed
up
to
run
that
agency.
Coinbase
Chief
Legal
Office
Paul
Grewal
said
its
Tuesday
motion
is
responding
to
the
judge’s
points
from
a
hearing
earlier
this
month,
but
it
still
seeks
the
chairman’s
correspondence
on
crypto,
any
discussions
within
the
various
divisions
of
the
SEC
and
what
the
agency
officials
may
have
talked
about
before
approving
Coinbase
as
a
public
company.

The
regulator
will
have
a
chance
to
respond
by
next
month,
though
Tuesday’s
motion
claims
the
SEC
“refuses
to
search
any
document
outside
of
a
self-selected
group
of
Enforcement
Division
investigatory
files”
and
won’t
ask
Gensler
“whether
he
used
his
personal
email
for
communications
about
his
public
statements
on
these
subjects.”

The
SEC’s

enforcement
action
against
Coinbase
accused
the
company
of
offering
unregistered
securities
and
running
an
unregistered
exchange.
The
company
denies
that
the
tokens
being
traded
were
securities
and
that
its
exchange
falls
under
SEC
rules,
though
it
also
argues
the
regulator
has
made
a
mess
of
outlining
industry
standards.
Coinbase
has
also
sued
the
SEC
on
the
latter
point,
and
the
resolution
of
all
the
exchange’s
legal
disputes
could
be
central
to
resolving
U.S.
crypto
policy.

Gensler’s
personal
view
on
crypto
is
central
to
Coinbase’s
argument
that
the
agency
has
been
inconsistent
with
how
it’s
tried
to
direct
the
industry
to
comply
with
securities
laws,
Grewal
said.
But
when
the
company
sought
to
subpoena
Gensler’s
private
communications,
the
judge
said
Coinbase
was
acting
inappropriately.

Jorge
Tenreiro,
an
SEC
senior
trial
attorney,
argued
at
a
July
11
hearing
that
Gensler’s
communications
before
he
became
chair
were
not
relevant
to
the
case.

The
new
motion
seeks
anything
he
said
to
anybody
while
at
the
SEC,
including
in
a
private
capacity.

“Both
the
SEC
and
Mr.
Gensler
should
be
ordered
to
produce
relevant
documents
about
Mr.
Gensler’s
public
statements;
and
as
to
Mr.
Gensler,
if
there
are
no
relevant
documents
and
communications
in
his
personal
email,
he
should
say
so,”
the
motion
argued.

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