Coinbase Narrows Demand for SEC Chair Gensler’s Crypto Messages

Cryptocurrency exchange Coinbase has filed a motion with the Securities and Exchange Commission to produce internal correspondence regarding its discussions on cryptocurrencies, including messages from Chairman Gary Gensler.

The company backed down from a more aggressive effort it had made earlier, requesting documents from before Gensler started working at the agency.

Coinbase Inc. (COIN) is pursuing internal rumors at the U.S. Securities and Exchange Commission (SEC) — including Chairman Gary Gensler’s own memos — that could shed light on allegations that it is pursuing cryptocurrency exchanges as illegal businesses, but the scope of the latest request filed Tuesday was narrowed after a federal judge resisted.

The company heard from Judge Katherine Polk Failla of the Southern District of New York who said Coinbase had gone too far in requesting communications from the SEC chairman over the years, including messages from before he emerged to lead the agency. Coinbase Chief Counsel Paul Grewal said Tuesday’s move was responsive to the judge’s points from a hearing earlier this month, but still sought correspondence from the chairman about cryptocurrency, any discussions at the SEC’s various divisions and any issues agency officials may have discussed before approving Coinbase as a public company.

“What we’re ultimately asking for here is transparency around how the SEC conducts its business,” Grewal told CoinDesk in an interview. “We think government transparency in general is a good thing. We think it’s even more important when you’re being sued in a case that the government chooses to do that we have full visibility into documents that may be relevant to our case.”

The regulator will have a chance to respond by next month, but Tuesday’s motion alleges that the SEC “declined to seek any documents outside of the Enforcement Division’s own select investigative files” and would not ask Gensler “whether he used his personal email in communications related to his public statements on these matters.”

The SEC’s enforcement action against Coinbase accused the company of offering unregistered securities and operating an unregistered exchange. The company denies that the tokens it trades are securities and that its exchange falls under SEC rules, but it also argues that the regulator has created confusion in setting industry standards. Coinbase has also sued the SEC on this last point, and resolving all of the exchange’s legal disputes could play a central role in unraveling U.S. crypto policy.

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Gensler’s personal view of crypto is at the heart of Coinbase’s claim that the agency has acted inconsistently in trying to direct the industry to comply with securities laws, Grewal said. But when the company tried to subpoena Gensler’s private communications, the judge said Coinbase had acted improperly.

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

The new motion seeks an investigation into everything he said to anyone, even in a private capacity, during his time at the SEC.

“Both the SEC and Mr. Gensler should be ordered to produce relevant documentation about Mr. Gensler’s public statements; as for Mr. Gensler, if relevant documentation and communications are not in his personal email, he should so indicate,” the motion argued.

Read More: Judge Sends Coinbase Back to the Drawing Board Over SEC’s Efforts to Subpoena Gary Gensler