As a seasoned researcher with over two decades of experience in financial markets and regulatory affairs, I find myself intrigued by this recent development between Coinbase Global Inc and the SEC. The extension of the discovery deadline until February 2025 is an interesting twist, especially considering the extensive documentation requirements involved in such a case.
In its legal case against American cryptocurrency platform Coinbase Global Inc (NASDAQ: COIN), the Securities and Exchange Commission (SEC) has petitioned the court to move the discovery deadline to February 2025, which is a shift of four months from the initial October 18 deadline. This extension, as requested in a letter to Judge Katherine Faila, could result in a delay for Coinbase.
Coinbase Agrees to Discovery Deadline Extension
Alongside the SEC’s demand, the government agency has presented a draft for a Revised Discovery Management Plan. As stated by the agency, Coinbase Inc. and Coinbase Global Inc., who are parties in the ongoing lawsuit, have consented to the extension that was requested. The agency emphasized that the case between the SEC and Coinbase involves extensive discovery needs, such as the production of numerous documents totalling thousands.
According to the agreed terms, the Securities and Exchange Commission (SEC) is currently examining approximately 133,582 distinct records. The additional time granted by the extension will allow the SEC to meet the Court’s requirements as they stated.
For the first time in the SEC vs. Coinbase lawsuit, one party is requesting a delay in meeting the deadline for fact-finding. This move isn’t surprising given that the Commission has had to publicly correct its previous use of the term “crypto asset securities” in similar cases, which may have influenced their decision.
In simpler terms, Paul Grewal from Coinbase noted the advancements in their Freedom of Information Act (FOIA) lawsuit against the Federal Deposit Insurance Corporation (FDIC). The aim is to obtain copies of the letters sent to banks informing them that they had stopped doing business with cryptocurrency companies. He confirmed that the court has requested the FDIC to provide a “Vaughn Index,” which is like a log detailing the reasons for any redactions or withholdings made in response to the FOIA request.
Legal expert James Murphy, often referred to as “MetaLawMan,” voiced his agreement with Grewal’s stance that pressure should be applied to persuade regulators to disclose the truth about Operation Choke Point 2.0. This initiative, led by the government, aimed at discouraging conventional financial entities from dealing with cryptocurrency companies.
SEC Chair Gary Gensler May Be on His Way Out
The Chair of the SEC, Gary Gensler, is under investigation for potentially breaching federal law due to accusations that he hired some individuals within the agency based on their political leanings. Previously, Markus Thielen, founder of 10X Research, had forecasted that Gensler’s career trajectory might be connected to the results of the upcoming 2024 presidential election.
Despite Thielen’s observation that SEC chairs typically step down when a new president comes into office, Republican presidential candidate Donald Trump has pledged to dismiss Gensler on his inaugural day if he wins the election. Thielen, in fact, speculates that Gensler might resign as early as January/February 2025. If Thielen’s predictions hold true, it’s possible that Gensler won’t be around to oversee the conclusion of the Coinbase case.
There’s been a lot of discussion within the crypto community about the possibility that Robinhood’s Chief Legal Officer, Dan Gallagher, might take over from Gensler as SEC Chair if Trump were to win the election. Compared to the current SEC Chair, Gallagher is more favorable towards digital assets. Other names mentioned in these discussions include J. Christopher Giancarlo and Heath Tarbert, who have both served as heads of the Commodity Futures Trading Commission (CFTC) in the past.
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2024-09-19 16:39