During a recent hearing, Judge Katherine Polk Failla expressed her disapproval of Coinbase’s attempt to subpoena SEC chair Gary Gensler in the ongoing case against the firm. Failla criticized Coinbase’s request, particularly noting that it included Gensler’s statements prior to him becoming SEC chair in 2021. The judge found Coinbase’s arguments to be “speculative” and not persuasive, pointing out that obtaining Gensler’s pre-chair statements would pose difficulty for the company. Despite her criticism, Failla did acknowledge Coinbase’s concerns, stating, “It does trouble me if you’ve been stonewalled.”
SEC lawyer Jorge Tenreiro opposed Coinbase’s request, describing it as “incredibly intrusive” against a public official. Tenreiro emphasized that the focus of the proceedings should be on the SEC’s actions rather than Gensler’s past statements. He argued that Gensler is neither a fact witness nor an expert witness on the law, urging the court to quash Coinbase’s subpoena request. Failla concurred with Tenreiro’s point, emphasizing her concerns about the disproportionate burden of inquiry into Gensler’s pre-chair statements.
Coinbase’s lawyers highlighted a case involving Ripple where the court ordered the discovery of multiple custodians, including then-SEC chair Jay Clayton. However, Tenreiro responded by pointing out that the SEC had sought to prohibit Ripple from obtaining certain information by searching SEC staff’s personal devices. This comparison raised questions about the validity and scope of Coinbase’s request to subpoena Gensler.
In June, Coinbase requested documents and communications related to Gensler’s public comments on digital assets, platforms, and staking as a service. The request covered statements from May 2021 to September 2023, as well as Gensler’s aforementioned pre-chair communications. Coinbase also made 33 other requests for documents and communications regarding the SEC. The SEC later filed a motion to quash the subpoena against Gensler in a personal capacity, which Coinbase argued against, citing the relevance of Gensler’s past statements to its defense.
The SEC initiated a lawsuit against Coinbase in June 2023, alleging that the firm operated as an unregistered exchange, broker, and clearing agency. The regulator also accused Coinbase of engaging in unregistered offerings and sales of securities by offering staking-as-a-service. These allegations form the basis of the ongoing legal battle between Coinbase and the SEC.
Coinbase’s attempt to subpoena SEC chair Gary Gensler has faced criticism from Judge Katherine Polk Failla and opposition from SEC lawyer Jorge Tenreiro. The dispute over the relevance and scope of Gensler’s communications highlights the complexities of the legal proceedings between Coinbase and the SEC. As the case unfolds, the court’s decisions regarding the subpoena request and the implications of Gensler’s past statements will play a crucial role in determining the outcome of the lawsuit.
