Underwood v. Global
- Paul Engelmayer
- 1:21-cv-08353
- U.S. District Court · Southern District of New York
- 6
Underwood v. Coinbase, Judge Engelmayer granted plaintiffs’ motion to compel a prepared witness about token-reward policies and practices.
The order directly affects the plaintiffs and Coinbase Global, Inc. and Coinbase, Inc. Coinbase must provide a prepared corporate witness for up to two hours on specified token-reward policies and practices. The fact-discovery deadline otherwise remains in effect, and limited portions of plaintiffs’ filings remain sealed.
What happened
In Christopher Underwood et al. v. Coinbase Global, Inc. et al., plaintiffs asked Coinbase to provide a corporate witness for additional questioning about token rewards. The dispute arose in a putative class action alleging that Coinbase sold digital assets that were securities without required registration.
Coinbase had designated Jaclyn Sales as its witness, but plaintiffs said she was not prepared to answer questions about staking rewards and governance rewards. The court held that those subjects fit within the agreed topic of Coinbase’s policies and practices concerning token rewards, were relevant to plaintiffs’ claims, and would impose little additional burden.
Judge Engelmayer granted the motion to compel. Coinbase must promptly provide a prepared witness for up to two hours on its token-reward policies and practices from October 8, 2019, through September 30, 2024, while the October 3, 2025 fact-discovery deadline otherwise remained in effect. The court also granted plaintiffs’ motion to seal limited portions of their filings.
The detailed version
- Underwood v. Global · No. 1:21-cv-08353
- Paul Engelmayer
- Oct. 7, 2025
Background
This order resolved a discovery dispute in a putative class action. Plaintiffs pursue claims against Coinbase Global, Inc., Coinbase, Inc., and individual defendant Brian Armstrong under the Securities Act of 1933 and state law. Plaintiffs allege that Coinbase lists and sells digital assets that qualify as securities without registering with the U.S. Securities and Exchange Commission as a securities exchange or broker-dealer. The opinion states that claims under the Securities Exchange Act of 1934 had been dismissed.
Plaintiffs timely noticed a deposition of Coinbase under Federal Rule of Civil Procedure 30(b)(6), which allows a party to question an organization through a witness prepared to testify about specified subjects. Coinbase agreed to designate a representative to testify about its general policies and practices from October 8, 2019, through September 30, 2024, concerning “airdrops” or “rewards” of tokens.
Coinbase designated senior director of communications Jaclyn Sales. During her September 19, 2025 deposition, Coinbase objected to questions about staking tokens and governance rewards as outside the agreed scope. Sales also testified that she had not prepared with Coinbase’s counsel to address those issues. The deposition ended after approximately three hours and twelve minutes, although up to seven hours had initially been allotted. Coinbase later declined plaintiffs’ request for Sales or another corporate witness to testify about staking rewards, governance rewards, and other Coinbase rewards programs.
Parties’ Positions
Plaintiffs argued that staking rewards, governance rewards, and other rewards programs fell within the agreed topic of “rewards of tokens.” Coinbase argued that plaintiffs’ operative complaint did not expressly refer to Coinbase’s staking services or allege that staking support made Coinbase liable as a statutory seller. Coinbase therefore contended that the requested testimony was outside plaintiffs’ claims.
Court’s Analysis
The court agreed with plaintiffs. It reasonably interpreted “rewards of tokens” to include rewards programs, including staking rewards and governance rewards. Sales’s testimony supported that interpretation because she acknowledged that both staking rewards and other token rewards result in users receiving tokens, even though the actions required to receive them may differ.
The court also noted that Coinbase had not made an objection comparable to its objection concerning testimony about “airdrops or similar means,” nor had it otherwise limited the broader phrase “rewards of tokens.” The court rejected Coinbase’s narrow view of permissible discovery under Rule 26(b)(1), which permits discovery of nonprivileged information relevant and proportional to the needs of the case.
The court found the requested testimony relevant because the operative complaint alleged that Coinbase solicited token sales by referring to participation rewards. The court further found that the burden on Coinbase of producing a witness for a two-hour deposition was minimal, particularly because Sales had testified for only about three hours and twelve minutes of the seven hours originally allotted.
Ruling
Judge Paul A. Engelmayer granted plaintiffs’ motion to compel Coinbase to produce a Rule 30(b)(6) witness prepared to answer questions about Coinbase’s policies and practices, between October 8, 2019, and September 30, 2024, concerning token rewards, including staking rewards and governance rewards. Coinbase was ordered to promptly make such a witness available for up to two hours, limited to that subject. The October 3, 2025 deadline for fact discovery otherwise remained in effect.
The order also states that the court granted plaintiffs’ motion to seal limited portions of the motion and two of its four exhibits, finding the redactions and sealing narrowly tailored and necessary to protect commercially sensitive information.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.