Coinbase Seeks CFTC’s Cooperation in SEC Lawsuit: Report

Coinbase has made a significant stride in the ongoing SEC lawsuit by filing a narrow motion in the Southern District of New York (SDNY). The exchange urges the Commodities Futures Trading Commission (CFTC) to produce communications with issuers of 12 tokens in question. According to Paul Grewal, Coinbase’s Chief Legal Officer, the CFTC’s documents could be a game-changer in the exchange’s defense against the SEC’s allegations.

Today, @Coinbase filed a narrow motion in DDC to compel @CFTC to produce communications between the agency and the 12 token issuers named in our @SECGov enforcement suit. These are the same types of comms that the SDNY already granted against the SEC. Basic due process requires…

— paulgrewal.eth (@iampaulgrewal) October 1, 2024

Coinbase’s Motions To Compel

Previously, Coinbase requested the court to compel the Securities and Exchange Commission (SEC) to submit crucial documents. The exchange demanded the SEC’s submission of details regarding the interaction with the token issuers. In response to the motion, Judge Katherine Polk Failla ordered the regulators to produce the documents. Coinbase’s motions to “compel” were a part of the exchange’s efforts to prove the SEC’s allegations wrong. In the 2023 lawsuit, the SEC argued that Coinbase offered unregistered securities.

Coinbase has now requested the court’s assistance in obtaining cooperation from the CFTC for the ongoing lawsuit. According to Grewal, the documents are essential to shedding light on regulatory guidelines for cryptocurrencies. CFTC’s documents could help determine if the tokens are securities. The exchange argued that the details would be “critical to Coinbase’s ability to defend itself against the allegations in the SEC Action.” They also demanded documents on the agencies’ “regulatory authorities over digital assets, including market uncertainty on this subject.”

In August 2024, Coinbase challenged the CFTC’s proposal on event markets. The exchange called for a reassessment of the proposal, arguing that it could significantly impact the predictive event contracts. Crypto exchange Gemini also joined Coinbase to urge CFTC to withdraw their allegedly vague event contracts proposal. As per the companies’ assertions, the proposal would ban all event contracts in the United States.