The Securities and Exchange Commission (SEC) and Coinbase have clashed over discovery in a lawsuit brought by the US regulator.
Recall that the SEC filed charges against Coinbase in June 2023. The regulator accused Coinbase of operating its crypto asset trading platform as an unregistered national securities exchange, broker and clearing house.
The SEC also charged Coinbase with failing to register the offering and sale of its cryptocurrency asset staking program as a service.
In a letter filed in the Southern District Court of New York on November 19, 2024, the SEC accuses Coinbase of obstructing the discovery process.
Coinbase is seeking to prevent the SEC from taking any filings until April 1, 2025, and to further extend fact-finding for more than three additional months.
The SEC disagrees and argues that the Court should deny Coinbase’s motion.
The SEC says:
“The Court should not reward Coinbase’s tedious discovery practices — including long delays in document production, failure to cooperate in scheduling depositions, and failure to timely produce a privilege log despite repeated requests — with an additional, unnecessary extension of deadlines. Nor is there any basis, under the Federal Rules or otherwise, to preclude a party from taking depositions until the end of what is supposed to be a retrial discovery proceeding.”
The SEC says Coinbase’s discovery efforts to date have been anything but diligent. Coinbase has created less than 6,000 documents and no privilege log. The limited documents he produced took months to arrive and only after numerous meetings with Coinbase.
Notably, the SEC issued its first set of requests for production (RFP) in April 2024, however as of November 18, 2024, Coinbase was still producing documents responsive to that RFP. The SEC issued its second RFP on July 1, 2024, but Coinbase informed the SEC that it would not be able to complete production until November 22, 2024. And the SEC issued its third RFP on August 22, 2024, but almost three months later Coinbase has not said when it will begin producing documents in response.
In contrast, the SEC has produced a total of 286,386 documents. And he has conducted the Court’s review of more than 133,000 additional documents diligently, having reviewed over 100,000 to date.