Coinbase has taken legal action by filing a motion in federal court to compel the Commodity Futures Trading Commission (CFTC) to release its communications with several cryptocurrency token issuers. This move comes as part of Coinbase’s defense strategy against allegations made by the Securities and Exchange Commission (SEC). The SEC has accused Coinbase of selling 12 cryptocurrencies that it categorizes as unregistered securities.
In its motion submitted on October 1, Coinbase emphasized that the information it seeks from the CFTC is crucial for understanding whether the tokens in question meet the definition of securities. The exchange disclosed that it initially issued a subpoena to the CFTC in July, marking its second attempt to obtain this information following a broader subpoena a month earlier. However, Coinbase has expressed frustration at the lack of cooperation from the CFTC, stating that the agency has not conducted any searches in response to its requests.
Coinbase pointed out that both the SEC and the CFTC had previously engaged with digital asset issuers to better understand the industry’s regulatory status, thereby supporting its claim to access relevant information. The exchange alleges that the CFTC dismissed its initial subpoena citing concerns over overbreadth, burden, and privilege but indicated a willingness to reconsider if the request were narrowed.
Yet, Coinbase claims the CFTC has rejected its second subpoena as well, arguing that the request is too vague and burdensome. In its motion, the exchange contended that the CFTC has not demonstrated that processing the request would be burdensome and stated that there is no applicable privilege since communications pertained to outside parties.
This legal dispute escalated after the SEC filed a lawsuit against Coinbase in June 2023, accusing the exchange of operating illegally as a broker, securities exchange, and clearing agency while listing 13 specific tokens as unregistered securities.
