US SEC Wants Extension of Discovery Deadline in Coinbase Lawsuit

Coinbase has reportedly agreed to a demand for a discovery deadline extension requested by the US SEC.

Key Notes

The SEC has asked Judge Faila to approve a new February discovery deadline in its Coinbase case.The commission noted that Coinbase has agreed to this shift in date.The market regulator is under fire for many oversight inconsistencies.

The United States Securities and Exchange Commission (SEC) has requested that the court extend the discovery deadline to February 2025 in its lawsuit with American cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN). The agency made this request in a letter to Judge Katherine Faila asking for an extension from October 18 to February 18 next year. This is an unexpected four-month pause for the exchange.

Coinbase Agrees to Discovery Deadline Extension

In addition to the SEC’s request, the government agency has submitted a proposed Revised Case Management Plan. According to the agency, Coinbase Inc. and Coinbase Global Inc., the defendants in the lawsuit, have agreed to the requested extension. The agency further highlighted that the SEC vs. Coinbase case has extensive discovery requirements, including producing thousands of documents.

“Pursuant to that agreement, the SEC is reviewing at least 133,582 unique documents. The requested extension will provide the SEC the necessary time to comply with the Court’s Order,” the agency shared.

Since the beginning of the SEC vs. Coinbase case, this is the first time that any of the parties will seek an extension of the deadline to complete fact discovery. However, it is not unexpected that the Commission decided to take this step, considering how it had to publicly admit its mistake recently over the use of the term “crypto asset securities” in related cases.

Meanwhile, Coinbase CLO Paul Grewal pointed to the progress made on the FOIA suit against FDIC to get the “pause letters” sent to financial institutions indicating that they debanked crypto firms. He confirmed that the Court has asked the agency to give up a “Vaughn Index”, a sort of FOIA privilege log.

Pro-crypto lawyer James Murphy, known as “MetaLawMan”, also weighed in on the matter. He agreed with Grewal that pressure is needed to get regulators to tell the truth about Operation Choke Point 2.0. This was a concerted effort by the government to prevent traditional financial institutions from servicing crypto firms.

SEC Chair Gary Gensler May Be on His Way Out

SEC Chair Gary Gensler is facing a probe involving a violation of federal law after he allegedly recruited some people in the agency based on political affiliations. Two months ago, 10X Research founder Markus Thielen predicted that Gensler’s future could be tied to the outcome of the 2024 presidential election.

Although Thielen noted that SEC chairs usually leave when a new president takes over, Republican Presidential candidate Donald Trump has promised to oust Gensler on his first day in office if he wins the election. Thielen even thinks the SEC Chair might resign in January/February 2025. If his timeline is right, Gensler may not see the end of the Coinbase case.

The crypto community is abuzz with claims that Robinhood’s Chief Legal Officer (CLO) Dan Gallagher may replace Gensler if Trump wins. Gallagher, compared to the current SEC Chair, has a friendly stance on digital assets. Other names that have come up in these conversations are former CFTC heads, J. Christopher Giancarlo and Heath Tarbert.

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