A federal judge presiding over the legal battle between Coinbase and the US Securities and Exchange Commission (SEC) has indicated that the cryptocurrency exchange may not be allowed to access Chair Gary Gensler’s private communications prior to his appointment as head of the commission.
During a hearing on July 11 in the US District Court for the Southern District of New York, Coinbase’s lawyers argued that they should be granted access to data on Gensler’s personal devices, as the SEC had not provided any explicit assurances regarding his communications with market makers. The SEC’s legal team requested that Judge Katherine Polk Failla dismiss the subpoena for Gensler’s personal communications, stating that he was neither a fact witness nor an expert witness on the law in the Coinbase case.
According to Inner City Press, Coinbase’s lawyers stated, “We are unable to obtain information from the SEC. We included the time period before [Gensler’s appointment] because we attempted to engage with Mr. Gensler and the SEC, but they have declined to confirm whether he used his personal device to communicate about crypto.”
Judge Failla expressed that she did not necessarily agree with Coinbase’s arguments but was willing to hear them. She also mentioned that she had strong concerns about the excessive burden of investigating Gensler’s statements prior to his role as chair. She asked both parties to submit letters to the court by July 15.
The subpoena for Gensler’s personal devices was part of the discovery process in the SEC’s enforcement case against Coinbase, which was filed in June 2023. The regulator accused Coinbase of operating as an unregistered securities broker since 2019, thereby violating US securities laws.
Coinbase initially requested access to Gensler’s communications from his personal devices in April, claiming that he had shared his views and interacted with market participants in his personal capacity. The discovery request specifically targeted communications and documents related to Gensler’s opinions on cryptocurrency dating back to 2017.