Coinbase has asked a federal court to order an expedited search of Gary Gensler’s deleted text messages, after the Office of Inspector General revealed that the SEC erased nearly a year of his communications.
The company requested in a Thursday filing through History Associates, citing a report released on September 3 that confirmed the SEC left out text records when handling FOIA requests, even though many of those messages should have been preserved.
Court filing and Coinbase response
Coinbase argued that the deleted texts are a breach of transparency. The filing noted that the SEC had excluded messages that qualify as agency records, making FOIA requests incomplete.
Chief Legal Officer Paul Grewal posted on X(Twitter) that the SEC “destroyed documents they were required to preserve and produce” and added that the Inspector General’s report confirmed it.
Grewal said Coinbase asked the court to act on what he called a violation of public trust and to prevent similar actions in the future.
The deleted records
The Inspector General’s report stated that the SEC permanently erased Gensler’s texts between October 2022 and September 2023. The messages were lost after the agency’s IT staff carried out a factory reset on his phone, which wiped all stored data.
The Inspector General’s office said the texts could have been saved under existing policies. That period overlaps with key moments in the crypto industry, including the collapse of FTX and the SEC’s expanding enforcement efforts against major exchanges.
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Timing and context
Coinbase stressed the importance of the missing year of communications. During that time, the SEC increased its actions against crypto companies, including Coinbase itself.
The overlap between those enforcement steps and the deletion of records has raised further questions about how the agency manages sensitive information.
Coinbase pointed out that it had asked for communications tied to crypto regulation and enforcement years earlier, yet those messages were not produced.
Further demands by Coinbase
In its filing, Coinbase said it is seeking expedited discovery to uncover the missing records. The company also asked for sanctions and immediate production of any remaining responsive texts.
Grewal said Coinbase wants the court to impose safeguards that will keep the SEC from deleting key documents again. He added that restoring trust requires accountability and swift measures to address the loss.
Wider implications
The absence of documents brings up the question of how federal institutions treat records and correspondence in important matters. Lack of trust towards the regulating institutions in these actions is mainly due to the absence of trust in the institutions’ legislative approach and speed in the digital assets sphere.
Criticism towards the SEC text policy, which is supposed to capture and retain records of emails and messages that contain valuable information regarding enforcement actions, is largely due to the absence of these documents.
This situation is part of a wider shift in the conflict determining the crypto-regulating actions between the regulators and the crypto firms.
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