Coinbase has filed a motion in federal court demanding sanctions against the U.S. Securities and Exchange Commission (SEC) after the agency permanently erased nearly a year's worth of text messages from former Chair Gary Gensler. The messages, spanning from October 2022 to September 2023, were deleted due to an SEC device reset policy and covered critical periods including the FTX collapse and key enforcement actions against crypto firms, including Coinbase itself.
An SEC Office of Inspector General (OIG) report confirmed the deletion and revealed broader record-keeping failures, with texts from over 20 senior officials potentially missing. The SEC allegedly failed to comply with Freedom of Information Act (FOIA) requests and court orders, delaying searches and using narrow terms. Coinbase, represented by History Associates, argues the SEC's actions violate federal record-keeping laws and undermine public trust in the agency's regulatory credibility.
Notably, 38% of recovered Gensler texts were 'mission-related,' including discussions with the Enforcement Division Director about timing actions against crypto platforms. Coinbase's Chief Legal Officer Paul Grewal highlighted the SEC's 'double standard,' noting the agency fined firms over $1 billion for similar record-keeping failures under Gensler's tenure.
