Coinbase Requests CFTC Documents to Defend Against SEC
Date: 2024-10-03 Author: Gabriel Deangelo Categories: BUSINESS
Coinbase has filed a federal lawsuit seeking to compel the Commodity Futures Trading Commission (CFTC) to provide information about its communications with several cryptocurrency issuers. The exchange believes that this information is key to its defense against the U.S. Securities and Exchange Commission (SEC).
In a motion filed on October 1, Coinbase is seeking to obtain CFTC communications with issuers of 12 cryptocurrencies that the SEC considers unregistered securities. The exchange is also seeking documents regarding the delineation of authority between the two digital asset regulators to help clarify legal uncertainty in this area.
Coinbase argues that the information is necessary to assess whether the cryptocurrencies in question meet the definition of securities, as stated by the SEC. In July, the exchange sent the CFTC a second request for this data after its first request in June was denied.
However, Coinbase said the CFTC ignored its requests and failed to perform any searches, despite federal Judge Catherine Faulk Failla ordering the SEC to provide similar information.
The exchange noted that both the SEC and CFTC have engaged extensively with digital asset issuers and other market participants in recent years to better understand the industry and its regulatory status. Coinbase says it has every right to access such important information held by the CFTC.
The regulator denied the first request, citing its excessive scope and privilege, but expressed a willingness to reconsider it if the requirements were narrowed. However, the second request was also denied, with the CFTC saying it was too broad and unclear, which would create an undue burden on the commission.
Coinbase noted in its motion that the CFTC had not provided evidence that the search for the data would be burdensome, and emphasized that no possible privileges could be applied to data obtained from outside parties.
The CFTC has not yet commented on this matter. Recall that in June 2023, the SEC filed a lawsuit against Coinbase, accusing the exchange of illegally operating as a broker, exchange, and clearing agency.
