Coinbase Seeks Sanctions After SEC Deletes Gensler Texts

Coinbase has filed a legal motion in federal court demanding sanctions and expedited discovery after the U.S. Securities and Exchange Commission (SEC) permanently deleted nearly a year’s worth of text messages from then-Chair Gary Gensler, covering a critical period from October 2022 to September 2023. These messages coincided with significant crypto events, including the collapse of FTX and major enforcement actions, and many contained discussions on enforcement and policy related to digital assets. The deletion occurred due to an SEC policy that wiped devices offline for more than 45 days, with insufficient backup protocols and failure to preserve records despite court orders and Freedom of Information Act (FOIA) obligations. An internal SEC Office of Inspector General investigation confirmed the deletion was systemic, reflecting poor device management and backup systems, and Coinbase argues this undermines the SEC’s credibility and transparency. Coinbase accuses the SEC of delaying searches, using narrow search terms, and withholding information, which they say has caused irreparable harm and damaged public trust in the regulator’s handling of cryptocurrency oversight. In response, the SEC has updated its policies, including banning senior officials from texting on agency devices and improving backup procedures, but Coinbase insists the agency must be held accountable for its record-keeping failures.