The Securities and Exchange Commission (SEC) and Coinbase have clashed over discovery in a lawsuit brought by the US regulator.
Let’s 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 agency.
The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program.
In a letter filed with the New York Southern District Court on November 19, 2024, the SEC accuses Coinbase of hindering the discovery process.
Coinbase seeks to prevent the SEC from taking any depositions until April 1, 2025, and to further extend fact discovery by more than three additional months.
The SEC disagrees and argues that the Court should deny the Coinbase Motion.
The SEC says:
“The Court should not reward Coinbase’s dilatory discovery practices—including its lengthy document production delays, failure to cooperate in scheduling depositions, and failure to timely serve a privilege log despite repeated requests—with an additional, needless extension of the deadlines. Nor is there any basis, under the Federal Rules or otherwise, to preclude a party from conducting depositions until the very end of what is supposed to be an iterative discovery process”.
The SEC says that Coinbase’s discovery efforts to date have been anything but diligent. Coinbase has produced fewer than 6,000 documents and no privilege log. The limited documents it has produced have taken months to arrive and only after numerous meetings with Coinbase.
Specifically, the SEC served its First Set of Requests for Production (RFP) in April 2024, yet as of November 18, 2024, Coinbase was still producing documents responsive to this RFP. The SEC served its Second RFP on July 1, 2024, but Coinbase has informed the SEC that it will not be able to complete production until November 22, 2024. And the SEC served its Third RFP on August 22, 2024, but nearly three months later Coinbase has not stated when it would begin producing documents in response.
By contrast, the SEC has produced a total of 286,386 documents. And it has conducted the Court-ordered review of the more than 133,000 additional documents in diligent fashion, having reviewed over 100,000 to date.
