The SEC asks the New York court to deny the aggressive requests of the exchange Coinbase

The Securities and Exchange Commission (SEC) of the United States has just responded to the subpoena request from the exchange Coinbase, inviting the New York court to pay attention to the delicate issue.

According to the officials of the supervisory agency, the crypto exchange would have requested the review of mountains of documents useless for the purposes of the case.

Among the claims made by Coinbase, there would also be emails from Gary Gensler dating back to his period before being appointed as president.

The SEC considers all this a great waste of time. However, Coinbase does not give up.

Let’s see all the details below.

The legal dispute between Securities and Exchange Commission and Coinbase: at stake a violation of US securities laws

What happened today between the Securities and Exchange Commission (SEC) and Coinbase in the case that also involves the New York court is like a soap opera.

Before delving into the details of the matter, let’s retrace the preamble of the feud that began last year between these two financial entities.

Everything started in June 2023, while the SEC was putting pressure on the US cryptocurrency exchange sector, the notification arrived towards the leading exchange Coinbase.

The federal entity had accused the digital asset exchange of offering its clients the opportunity to trade unregistered security tokens.

The issue mainly fell within the category of products from staking, which according to the Commission violated the Howei test and could not be traded.

In all this, Coinbase has also been accused of operating without the necessary registrations as a broker and clearing agency.

From that moment on it has been open war between the crypto sector and the Securities and Exchange Commission.

The dispute continued with lawyer battles for months, until in April 2024 Coinbase responded to the bullismo of the SEC. 

In this juncture, a subpoena was requested for the first request for the production of documents that could justify the accusations made in the past.

At the New York court two months later, the intention of the exchange Coinbase to verify some personal communications of the president Gary Gensler was also notified.

According to what has been reported in the appeals to the judge, the interest would be in alleged emails from Gensler dating back to about 4 years ago, before his federal appointment.

Furthermore, Coinbase also referenced a quote regarding the theme “security assets” stated by the same person during a lecture at MIT several years ago.

The cryptocurrency exchange thus plays dirty (exactly as its opponent did) and goes looking for the shadiest details related to the top representative of the SEC.

SEC asks the New York court to deny what was requested by the exchange Coinbase regarding Gary Gensler’s email

The SEC, horrified by the requests from the exchange Coinbase, filed a document yesterday with the tribunale of New York in which it asks the judge to dismiss such subpoena.

In the opinion of the U.S. federal agency, the request for personal communications from Gary Gensler appears to be a real “waste of time” for the purposes of the case.

In the letter to District Judge Katherine Polk Failla, the SEC made reference to a mass of totally irrelevant material. In this sense, the rejection of Coinbase’s insignificant claim was requested.

Initially, Judge Failla had requested a pre-trial conference, held by phone on July 11, to discuss the competing requests. 

From the very beginning, the magistrate had shown a certain dissent regarding the reference to Gensler’s personal communications. These were his words after the meeting:

“I was a bit surprised and not in a good way,” Failla said of Coinbase’s motion on July 11. “I found the arguments, at least as articulated in the July 3 response, bordering on the fatuous … I was not substantially moved by any of the arguments.”

Subsequently, Failla referred the request of Coinbase, ordering his lawyers to file a motion to compel the parties to resolve the dispute in the open.

On July 23, Coinbase forced the Court to take a position, slightly narrowing the scope of its request, but continuing in the same direction.

We now await a definitive response from the New York court which will determine whether Coinbase has the right to dig back into the past of the SEC official.

Who knows if Gensler’s closet hides any skeletons, and if the US exchange will manage to bring the alleged truth to light.

Gary Gensler could be fired in November, favoring a potential victory for Coinbase 

The intensification of the clash between SEC and the exchange Coinbase at the New York court is not the only factor that jeopardizes Gary Gensler’s career.

There are also political aspects at stake that could have a decisive impact on the future of the president of the U.S. federal agency.

His publicly anti-crypto character has indeed created quite a few complaints from the Republicans, who have sided with the sector during the election campaign.

Donald Trump has promised in this regard that if he is elected president in November, he will fire Gensler on the spot, freeing the crypto industry from its main enemy.

All this was made public in Nashville, at the famous Bitcoin conference, where the presidential candidate reiterated his support for crypto.

The immediate dismissal of Gensler, although it remains a potentially fallacious promise from a politician, is currently the most likely scenario.

According to market forecasts Polymarket, Trump appears as the favored candidate in the November elections with a 52% share.

Despite this, we remember how a few days ago this percentage was close to 60 points while now the situation reflects a greater participation of the democrats.

The arrival of Kamala Harris in support of Joe Biden’s concerning medical conditions has led to an increase in the chances of victory in the election campaign.

The armchair of Gensler remains still at risk, while however his defenders gain ground. Most likely the results of the presidential elections will also determine who will prevail between SEC and Coinbase in the clash of titans.