Coinbase has reduced the scope of its calls to Gary Gensler, chairman of the US Securities and Exchange Commission (SEC).
Instead of seeking access to Gensler’s private correspondence spanning his entire career, the exchange decided to narrow the scope and focus only on his correspondence from his tenure as SEC chairman.
Initially, Coinbase’s legal team argued that obtaining Gensler’s private conversations, both before and during his tenure as SEC chairman, was necessary for their defense in the securities regulator’s pending lawsuit against them.
Coinbase adjusts its subpoena request
In a July 15 filing, Coinbase revealed its decision to adjust its subpoena request, taking into account the objections Judge Katherine Polk Failla expressed last week.
“With respect to the subpoena to Mr. Gensler, Coinbase has decided to request the production of Mr. Gensler’s documents only for the duration of his term as SEC chairman,” the filing reads.
Gensler took office as SEC chairman in April 2021, and Coinbase’s revised approach is now aligned with the specific timeframe of Gensler’s chairmanship.
Initially, Coinbase had been seeking access to Gensler’s communications since 2017, a year before his commitment to teach a course on “Blockchain and Money” at the Massachusetts Institute of Technology in 2018.
Coinbase argued that understanding the evolution of Gensler’s views on cryptocurrency regulatory issues was central to their case.
However, Judge Failla expressed concerns about the burden imposed by the investigation into Gensler’s statements before he became SEC chairman, indicating a reluctance to grant Coinbase’s original request.
Coinbase is required to send its initial request on July 23, and the SEC will have until August 5 to file a response.
Coinbase sued by SEC
The SEC filed a lawsuit against Coinbase in June 2023, alleging that the exchange violated federal securities laws by listing 13 tokens it considers to be securities.
The agency claimed that Coinbase had been operating as an “unregistered securities broker” since 2019, nearly two years before its initial public offering in April 2021. Coinbase maintains its position that tokens listed on its exchange should not be classified as securities, arguing that they fall outside the scope of SEC regulation.
Recently, Coinbase accused the SEC and the Federal Deposit Insurance Corporation (FDIC) of improperly blocking document requests. The exchange accuses the regulators of blocking access to documents that should be available under the Freedom of Information Act (FOIA).
Meanwhile, Bank of America (BAC) recently raised its recommendation on Coinbase shares from “weak” to neutral, raising its target price for Coinbase to $217 from $110.
In addition to Bank of America, investment banking firm KBW also raised its target price for Coinbase. In a research analysis, KBW raised its target price for Coinbase from $160 to $230 , while maintaining its market performance rating.
