Coinbase has filed a petition in federal court to compel the Commodity Futures Trading Commission (CFTC) to provide its communications with specific crypto token issuers. This request is part of Coinbase’s strategy to defend itself against allegations brought by the Securities and Exchange Commission (SEC).
In a motion submitted on October 1, Coinbase requested access to the CFTC’s communications regarding 12 cryptocurrencies that the SEC claims are unregistered securities that Coinbase has traded. The exchange is also seeking documents related to the regulatory jurisdictions of both the SEC and CFTC over digital assets, particularly given the existing market uncertainties surrounding these issues.
Coinbase argued that this information is vital for its defense against the SEC’s claims, asserting that it will help determine whether the 12 cryptocurrencies in question meet the legal definition of securities. The exchange noted that it first subpoenaed the CFTC for these communications in July, marking its second attempt following a broader initial request in June.
The motion claims that the CFTC has been uncooperative, stating that the agency “has stonewalled” Coinbase’s requests and allegedly “hasn’t even conducted a single search” for the requested information. This comes despite a ruling by New York federal judge Katherine Folk Failla, who ordered the SEC to produce similar relevant documents.
According to Coinbase, both the SEC and CFTC had previously sought engagement with digital asset issuers and market participants to enhance their understanding of the industry and its regulatory framework. Coinbase contends that it is entitled to access the pertinent information in the CFTC’s possession.
After its initial subpoena was rejected by the CFTC on grounds of being overly broad and burdensome, the regulator indicated a willingness to reconsider if the request was narrowed. However, Coinbase claims that its subsequent subpoena faced the same objections, with the CFTC describing it as “overly broad, vague, and placing an undue burden” on the agency.
In its motion, Coinbase argued that the CFTC had not demonstrated any actual burden in retrieving the information and contended that no privilege applies to the communications, as they involve external parties.
In June 2023, the SEC filed a lawsuit against Coinbase, alleging that the exchange was operating as an illegal broker, securities exchange, and clearing agency. The SEC’s filing claimed that 13 tokens, including Solana, Cardano, and Polygon, qualify as unregistered securities.
