Coinbase Calls for SEC Responsibility Regarding Missing Gensler Messages
Coinbase is fiercely contesting the SEC. The firm has submitted a motion in federal court seeking sanctions and accelerated discovery after discovering that text messages from former SEC Chair Gary Gensler had been erased. These texts covered a nearly full year, encompassing a period rich with significant crypto occurrences.
Timeline of Erased Messages
The erased texts range from October 18, 2022 to September 6, 2023. This includes critical events like the downfall of FTX and several notable enforcement activities. An internal report indicates that the texts were eliminated when Gensler’s government-issued phone underwent a reset.
The Gensler SEC destroyed documents they were required to preserve and produce. We now have proof from the SEC’s own Inspector General. Today we ask the federal court to address this gross violation of public trust to ensure that it never happens again. 1/3 pic.twitter.com/DPLtHUiolj
— paulgrewal.eth (@iampaulgrewal) September 11, 2025
The SEC maintained a policy to wipe inactive devices, and regrettably, backups were not current. Once the reset occurred, everything was erased, including logs that could have assisted in identifying what went amiss.
Coinbase Sees More Than Just a Technical Error
Coinbase asserts that this isn’t merely a technical blunder. They emphasize that the SEC was mandated by court orders to retain all communications related to crypto policy. This encompasses text messages. The SEC’s failure to search for or produce these messages raises significant concerns. Coinbase points out that nearly 40 percent of the messages that were retrieved were related to enforcement or policy. These were not just informal exchanges. They could have influenced how the SEC navigated crypto during a pivotal moment.
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Insights from the Inspector General’s Report
The SEC’s internal oversight confirmed various issues. Gensler’s device had ceased syncing with the agency’s system for over two months. After 45 days of inactivity, the wipe policy activated. When the phone underwent a reset, it eradicated the texting application and all its contents. Due to absent or incomplete logs, the complete timeline could not be reconstructed. This resulted in gaps in what investigators could confirm.
How the SEC Reacted
Following the incident, the SEC implemented several corrective measures. Senior officials are now prohibited from sending texts from agency devices. Backup procedures have been revised, and new training has been introduced. The SEC also informed the National Archives that records had been lost. Yet, Coinbase contends this is insufficient. The firm aims for the court to compel the SEC to provide all communications linked to crypto compliance and to accept accountability for what was lost.
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Importance of the Situation
These lost texts were exchanged during a period when the SEC was adopting a more assertive stance on crypto. If messages regarding those decisions were misplaced, it would impact how firms can defend themselves in legal contexts. It also raises broader questions about the extent to which the public can trust regulatory transparency. Agencies must adhere to the same regulations they enforce. When they fail to do so, the repercussions are not merely technical, they are institutional.
Potential Next Steps
Coinbase is demanding more than merely the texts. They seek accountability. They want the SEC to be held to the same standards as others. The court will determine whether sanctions are warranted and the extent of discovery permitted. This could establish a benchmark for how governmental bodies manage internal communications, particularly during significant industry crackdowns.
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Key Takeaways
- Coinbase has initiated a motion requesting sanctions and expedited discovery following the deletion of former SEC Chair Gary Gensler’s texts.
- The erased texts encompass major crypto occurrences, including the FTX fallout, and may have contained policy discussions that the SEC was obligated to preserve.
- An internal report disclosed that Gensler’s phone was reset under a wipe policy, and incomplete backups rendered the messages irretrievable.
- Coinbase maintains that this is not just a technical matter, but a significant lapse in fulfilling legal duties during a time of heightened crypto enforcement.
- The outcome could influence how governmental agencies manage record-keeping and transparency amid industry crackdowns in the future.
The post Coinbase Demands SEC Accountability Over Lost Gensler Texts appeared first on 99Bitcoins.
