by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, July 11 – Coinbase in the SEC's case against it is seeking access to Chairman Gary Gensler's personal device and private emails, including from before he chaired the SEC.
On July 11 U.S. District Court for the Southern District of New York Judge Katherine Polk Failla held a hearing. Inner City Press live tweeted it, thread:
Coinbase's lawyer: The SEC has not assured us that Mr. Gensler has not used his personal email and personal device to communicate with market participants. Their silence leaves no basis for the wholesale innocuation (?) of Mr. Gensler's personal device
Judge Failla: I understood from the SEC's opening submission that this request includes a period before his Chairmanship. You'll have a hard row to hoe on that. I find your arguments speculative. Coinbase's lawyer: Even the period when he'd been Chair, they say no Coinbase's lawyer: We're unable to get information from the SEC... The time period before, we included because we tried to engage with Mr. Gensler and the SEC, but they've refused to say he didn't use his personal device to communicate about crypto
Judge Failla: I do not find that argument persuasive. Just keep that in mind. Coinbase's lawyer: Mr. Gensler's pre-Chair communications would inform our ability to make a complete record about the fair notice defense
Judge Failla: I think you should cut your losses and go to your second point. Coinbase's lawyer: Mr. Gensler occupied a unique role in shaping the public understanding of crypto. Did fair notice exist for the entire period, including before Mr. Gensler was chair
Judge Failla: Since you have not indicated you are withdrawing the subpoena, I expect there will be further briefing. I won't agree with you necessarily but I hear you Coinbase's lawyer: We understand the significance. We aim be be constructive with Mr. Gensler
Judge Failla: It does trouble me if you've been stonewalled. I'm saddened to learn that there is another motion forthcoming from you. I'll be here for these motions.
SEC lawyer Jorge Tenreiro: What they are asking for, from a public official, is incredibly intrusive - officials have been things to do. The cases look at the SEC's actions, not the actions of one person. Before they ask us to pick up his personal phone, show us
SEC lawyer: Chair Gensler is not a fact witness, and is certainly not an expert witness on the law. We think the subpoena should be quashed. Coinbase's lawyer: The Ripple court ordered discovery of 19 custodians including then-Chair Clayton.
SEC lawyer: The issue of the personal devices did come up in Ripple - look at the endorsement in Docket Item 163. Judge Failla: I do have strong views about the disproportionate burden of inquiry into Mr. Gensler's statements before he became chair.
Judge Failla: You do not appear to be withdrawing the subpoena. I'd prefer you begin with a motion to compel. Coinbase's lawyer: We'll be glad to proceed that way. Judge: Make a schedule with the SEC, offline. Letter by Monday? Coinbase's lawyer: Certainly.
Judge Failla: OK, I'll await your papers. Have a good day.
More on X for Subscribers here & Substack here
Inner City Press will stay on the case.
The case is Securities and Exchange Commission v. Coinbase, Inc. et al., 23-cv-4738 (Failla)
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