Coinbase Pressures the CFTC for Documents To Aid Its Defense Against the SEC

The legal battle between US-based crypto exchange Coinbase and the Securities and Exchange Commission (SEC) has taken a new turn.

Coinbase has filed a motion to compel the CFTC to release its communications with some cryptocurrency issuers to aid its defense against the SEC.

The crypto exchange also requested documents detailing the extent of the two watchdogs' regulatory authority over crypto assets.

Coinbase Requests CFTC Documents to Bolster Defense Against SEC

On October 1, Coinbase filed a motion in the Columbia District Court to compel the Commodity Futures Trading Commission (CFTC) to submit communications it had with crypto issuers.

The crypto exchange claimed the documents are critical to its defense against the SEC.

According to the filing, Coinbase requested the derivatives regulator's correspondence with issuers of the 12 tokens the SEC claimed were unregistered securities. It asked for information on their development, uses, functionalities, promotion, and related blockchain networks.

In addition, the crypto exchange also wanted documents showing the scope of the regulators' oversight of digital assets. Coinbase asserts that the information will aid its defense against the SEC's allegations that a dozen tokens listed on its platforms are unregistered securities.

It noted that having the documents will help it review whether the transactions involving the 12 cryptocurrencies are investment contracts.

CFTC Knocked Back Coinbase Request for Relevant Information"

Coinbase asserts that before the ongoing lawsuit, the CFTC and the SEC solicited engagement with cryptocurrency issuers and other market participants. The regulators requested information to help them understand the digital assets industry and its regulatory status.

According to Coinbase, it subpoenaed the CFTC to provide this information in July, its second attempt after a broader subpoena in the previous month.

However, the exchange claimed the CFTC had refused its requests. It further claimed the commission never conducted any search despite Judge Katherine Folk Faila's order that the SEC provide the same category of information.

Further, the October 1 motion stated that Coinbase has the right to obtain such relevant information from the CFTC.

The crypto exchange also claimed the CFTC countered its subpoena, citing undue burden, privilege, and far-reaching. The regulator also said it would reevaluate the subpoena if Coinbase narrowed its request.

However, the CFTC denied the second subpoena, claiming it was vague, overboard, and burdened the commission.

Coinbase argued that the regulator didn't explain or substantiate how finding the information would burden it. It vehemently declined, claiming they couldn't do anything as the communications were in the hands of external parties.

The SEC sued crypto exchange Coinbase last year, accusing it of operating as an unregistered securities exchange, broker, and clearing house. The regulator also alleged that 13 tokens listed on Coinbase are unregistered securities.

These tokens include Cardano (ADA), Solana (SOL), Axie Infinity (AXS), Polygon (MATIC), Dash, Nexo, Filecoin, The Sandbox (SAND), Near, Voyager Token, and Internet Computer (ICP).

Meanwhile, the CFTC has yet to respond to requests for comment regarding the latest development.

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