SEC Vs. Coinbase On Pause: US Regulator Requests 4-Month Fact Discovery Delay

In a turn of events, the US Securities and Exchange Commission (SEC) has requested a court extension on its time to complete the fact discovery requirements for the lawsuit against Coinbase. The extension seeks to delay the deadline by four months, setting the new date after the US elections.

SEC Requests Extension For Fact Discovery Deadline

On Wednesday, the Securities and Exchange Commission requested a time extension to complete the fact discovery process on its case against Coinbase Inc. and Coinbase Global Inc. In a letter to Judge Katherine Polk Failla, the US regulator also sought an extension to amend the previously entered Civil Case Management Plan and scheduling order.

The document stated that the defendants had agreed to the extension, adding that no party has requested a time extension to complete the fact discovery in the SEC v. Coinbase lawsuit.

The SEC stated that it had made extensive efforts in the discovery process, producing hundreds of thousands of documents to complete the requirements. However, it argued that the court also ordered the US regulator to review additional documents “in ruling of Defendant’s Motion to compel.”

The order resulted in the need to review many new documents following its agreement with Coinbase on the terms for its “search and review of potentially responsive material.” Consequentially, the SEC considers that the four-month deadline extension will offer the necessary time to comply with said order.

Pursuant to that agreement, the SEC is undertaking a review of at least 133,582 unique documents. The requested extension will provide the SEC the necessary time to comply with the Court’s Order. See also ECF No. 161 (recognizing the potential need for an extension of fact discovery).

The extension would move the deadline from October 18, 2024, to February 18, 2025, which would also affect the subsequent deadlines in the case. As a result, the letter also seeks to move the affected deadlines by four months respectively.

Coinbase Continues Fights Against US Regulators

Moreover, Coinbase’s CLO Paul Grewal recently updated the community about its Freedom Of Information Act (FOIA) suit against the Federal Deposit Insurance Corporation (FDIC). In an X post, Grewal stated there has been progress in getting the “pause letters” sent to financial institutions “suggesting” that they debanked crypto firms.

Coinbase’s CLO also explained that the court had given the order to give up a “Vaughn Index,” which is “sort of a FOIA privilege log.” To Grewal, this represents a major step for the crypto community: “Inch by inch, we will get to the truth of Chokepoint 2.0,” he stated.

Lawyer James Murphy, known as MetaLawMan, suggested that applying more pressure on the regulators was great news as it would make it harder for “the administration to maintain the position that there is no such thing as #OperationChokepoint2.0.”

Many community members agreed with this sentiment, voicing their frustration with the US regulators. Murphy also criticized the US Congress for “not doing its work,” ultimately questioning why “a public company has to perform Congress’s oversight function.”