Cryptocurrency exchange Coinbase has filed a complaint against the U.S. Securities and Exchange Commission (SEC), accusing the regulator of destroying text messages from former Chair Gary Gensler.
Coinbase's Accusations Against SEC
Coinbase claims that the lost messages hindered its ability to examine the SEC's aggressive cryptocurrency policies under Gensler's leadership. These allegations surfaced in a filing submitted to a federal court in Washington. Lawyers from History Associates, a research group also seeking Gensler’s communications via the Freedom of Information Act, noted that the SEC failed to provide relevant records and allowed texts to be wiped due to a policy that deletes messages if a device is offline for more than 45 days.
Sanctions for Evidence Destruction
Coinbase argues that the SEC's failure to seek the text messages violated court orders mandating the production of all relevant documents, potentially warranting sanctions. The company has long criticized the SEC for regulating through enforcement rather than clear rules. Legal experts note that courts take evidence destruction seriously, especially after requests have been made.
Historical Context and Consequences
During his chairmanship from 2021 to early 2025, Gensler led about 100 cases against crypto firms to protect individuals from fraud. This period was challenging for the crypto industry, with events such as Ethereum's shift to proof of stake and the collapse of FTX. Coinbase also raised concerns over potential record losses of other senior officials, highlighting issues with SEC's recordkeeping practices.
Coinbase continues to push for accountability from the SEC, emphasizing that the regulator should not benefit from the loss of key communications. The court is expected to rule on the next steps in the coming weeks.
