LMX Labs, LLC d/b/a Coinbase Derivatives

December 12, 2023

VIA Email (FOIAsubmissions@cftc.gov)

Assistant Secretary of the Commission for

FOIA Privacy and Sunshine Acts Compliance

U.S. Commodity Futures Trading

Commission Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

RE: FOIA Confidential Treatment Request

Dear Assistant Secretary:

LMX Labs, LLC d/b/a Coinbase Derivatives (“CDE” or “Exchange”), hereby requests that the U.S.

Commodity Futures Trading Commission (the “CFTC” or “Commission”) accord confidential

treatment under the Freedom of Information Act (the “FOIA”) to the documents identified in the

attached appendix (“Appendix A”) which was submitted to the Commission staff via CFTC electronic

filing on December 12, 2023 and relates to a filing pursuant to Commission Rule 40.6(a). This

request pertains to all material set forth in Appendix A and the documents set forth therein. The

Exchange requests that confidential treatment be afforded as long as the Commission retains

Appendix A and the documents listed therein. In accordance with the Commission’s FOIA

regulations, Appendix A and the documents listed therein bear the designation “FOIA

CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS, LLC PURSUANT TO 17 CFR PART 145”.

This request for confidential treatment under the FOIA is made pursuant to Commission

Regulations 40.8 and 145.9(d), as Appendix A and the documents produced contain information

that would reveal the trade secrets or confidential commercial or financial information of the

Exchange and its affiliates. As required by Commission Regulation 40.8(c)(1), the Exchange has

submitted, together with this request, a detailed written justification in support of the confidentiality

of Appendix A attached as Appendix B.

This request shall not be construed as a waiver of any protection from disclosure or confidential

treatment under Commission Regulations or any other protection from disclosure or confidential

treatment accorded by law, and the Exchange will rely on and invoke any such confidentiality

protection with respect to Appendix A and the documents produced. The Exchange requests that

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145
the Commission advise the undersigned, its representative, in advance of any disclosure of

Appendix A and the documents produced pursuant to the FOIA so that this request for confidential

treatment may be further substantiated. The Exchange further requests that if any of the

Confidential Information is to be disclosed to Congress or any other federal or state governmental

agency or department, a request for confidential treatment be made by the Commission on the

Exchange’s behalf, or that we be permitted to make such a request directly.

If you have any questions or require further information, please contact the undersigned at

Jane.Downey@coinbase.com.

Sincerely,

/s/ Jane Downey

Chief Regulatory Officer

Attachment: Appendix A

Appendix B

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145
APPENDIX A

The following materials that accompanied LMX Labs, LLC, submission #2023-16 pursuant to 17

C.F.R. § 40.6(a) dated December 12, 2023:

Documents:

● Appendix A Crypto Market Maker Program

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145
APPENDIX B

This detailed written justification for confidential treatment of the attached appendix

(“Appendix A”) under the Freedom of Information Act (“FOIA”) is made pursuant to U.S.

Commodity Futures Trading Commission (“Commission”) Regulations 40.8 and 145.9(d), as

Appendix A contains information that would reveal the trade secrets or confidential commercial

or financial information of LMX Labs, LLC d/b/a Coinbase Derivatives (“CDE”).

The general test for determining whether commercial information is exempt from disclosure under

FOIA pursuant to this exemption is whether release of the information would “cause substantial

harm to the competitive positions of the person from whom the information was obtained.”

Acumenics Research & Tech. v. Dep’t of Justice, 843 F.2d 800, 807 (4th Cir. 1988) (quoting

National Parks & Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974)). There is no

requirement to demonstrate actual competitive harm, rather “[a]ctual competition and the

likelihood of substantial competitive injury is all that need to be shown.” Gulf & Western Indus.,

Inc. v. United States, 615 F.2d 527, 530 (D.C. Cir. 1979). Information is considered confidential

where (i) there is actual competition in the relevant market, and (ii) disclosure is likely to cause

substantial competitive injury. Id. With regard to proof of potential injury, evidence demonstrating

the potential for economic harm is sufficient, and neither the omission nor the courts must conduct

a sophisticated economic analysis to determine the likely effects of disclosure. Utah v. Bahe et al.,

256 F.3d 967, 970 (10th Cir. 2001); Public Citizen Health Research Group v. Food & Drug Admin.,

704 F.2d 1280, 1291 (D.C. Cir. 1983).

The information contained in Appendix A includes non-public information regarding confidential

commercial and/or financial information. CDE believes that disclosure of this information would

provide its competitors with valuable insights regarding CDE’s clients, access to its products, and

how CDE operates and funds its business. Disclosure of such information would allow other

execution facilities insight into the strengths and weaknesses of CDE which could be used to

achieve a competitive advantage. Disclosure of Appendix A would thus result in precisely the type

of competitive harm to CDE that the provisions of FOIA and 17 C.F.R. § 145.9(d)(ii) are designed

to prevent. See National Parks & Conservation Ass’n v. Kleppe, 547 F.2d 673, 684 (D.C. Cir. 1976)

(prohibiting disclosure where it would “provide competitors with valuable insights into the

operational strengths and weaknesses” of a company). Disclosure of the Confidential Information

would provide CDE’s competitors with an informational windfall at CDE’s expense that they are not

entitled to under FOIA. See Worthington Compressors, Inc. v. Costle, 662 F.2d 45, 52 (D.C. Cir.

1981) (“as a matter basic to our free enterprise system, private business information should be

afforded appropriate protection, at least from competitors”). The Confidential Information thus falls

squarely within the type of information that the provisions of FOIA and Commission Regulation

145.9(d)(ii) are designed to protect from disclosure.

For the foregoing reasons, CDE respectfully requests that the Commission maintain the confidential

privilege afforded to this type of information and refrain from releasing Appendix A as such action

could prove harmful to CDE.

FOIA CONFIDENTIAL TREATMENT REQUESTED BY LMX LABS LLC PURSUANT TO 17 C.F.R. PART 145