The US Securities and Exchange Commission (SEC) has recently requested a four-month extension to complete fact discovery in its lawsuit against Coinbase. The agency submitted a letter to Judge Katherine Polk Failla on Sept. 18, asking to extend the current discovery deadline from Oct. 18 to Feb. 18, 2025. This extension would allow the SEC to review a substantial volume of additional documents related to the case.
In the letter, the SEC highlighted its ongoing efforts to comply with the court’s discovery requirements, stating that it has already produced “hundreds of thousands” of documents for Coinbase. The regulator mentioned that it is currently following a court order and reviewing an additional 133,582 unique documents. The SEC reached an agreement with Coinbase on search terms and custodians for the review but stated that more time is needed to complete the task. This request marks the first of its kind in the case.
The SEC’s request also included a proposal to amend the Civil Case Management Plan, extending all subsequent deadlines by four months. This extension would impact future proceedings in the case, including key deadlines related to motions and trial preparations. Coinbase has consented to both extensions, allowing both parties more time to prepare for the next phase of the lawsuit.
The lawsuit between the SEC and Coinbase began in June 2023 when the SEC accused the exchange of operating as an unregistered securities broker. The SEC alleged that several digital assets offered on Coinbase’s platform were unregistered securities, violating US securities laws. The case is based on the Howey Test, a legal framework used to determine what constitutes a security.
Coinbase has refuted the SEC’s claims, arguing that the assets on its platform do not meet the definition of securities and that the company complies with existing laws. The case has involved extensive discovery efforts, with both parties agreeing to multiple document reviews. Additionally, Coinbase has filed a motion to dismiss the SEC’s lawsuit, claiming that the watchdog’s claims lack merit and that the agency is overreaching in its regulatory authority over cryptocurrencies. The exchange has also argued that the SEC has not provided sufficient clarity on which digital assets fall under securities law.
This legal battle between the SEC and Coinbase is crucial in the regulation of cryptocurrencies in the US and could have significant implications for the industry depending on its outcome. It is a complex case that involves detailed document reviews and legal arguments, highlighting the evolving regulatory landscape surrounding digital assets.