SEC Challenges Coinbase's Discovery Requests as 'Excessive'

The ongoing legal battle between the SEC and Coinbase has intensified as the regulator contests Coinbase’s discovery requests, deeming them excessively broad. The Securities and Exchange Commission (SEC) is challenging Coinbase’s bid to obtain a vast array of documents, including private communications from SEC Chair Gary Gensler. The SEC argues that Coinbase’s demands exceed what is necessary for the case and has labeled them disproportionate.

On August 5, the SEC submitted a motion to deny Coinbase’s extensive request. Coinbase seeks access to all internal and external emails about how the SEC applies securities laws to digital assets. The SEC has already provided over 240,000 documents and is reviewing an additional 117,000. According to the SEC, Coinbase's request for further discovery, comprising three million documents, would be overly burdensome and irrelevant to the case's central issues.

The SEC asserts that this additional document request is not pertinent to the legal arguments that will determine the case’s outcome, including the Howey analysis and fair notice defense. The Howey analysis is essential for deciding if specific assets are considered securities. Meanwhile, the fair notice defense evaluates whether Coinbase received adequate warning about the regulatory position on digital assets.

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