The U.S.-based cryptocurrency exchange Coinbase has accused the U.S. Securities and Exchange Commission (SEC) of destroying nearly a year’s worth of text messages from former Chair Gary Gensler. The exchange has also urged a federal court in Washington to impose sanctions on the regulator.
Coinbase claimed that the lost messages have hindered its ability to examine the SEC’s aggressive cryptocurrency policies under Gensler’s leadership. The accusation surfaced in a Thursday filing supporting litigation by History Associates, a research group seeking Gensler’s communications via the Freedom of Information Act.
History Associates’ lawyers have argued the SEC failed to provide relevant records and allowed texts to be erased due to a device policy that automatically deleted messages if a phone was offline for over 45 days. Coinbase Chief Legal Officer stated on X post that, “The SEC OIG report last week revealed texts from October 2022-September 2023 were destroyed.”
During his SEC Chairmanship from 2021 to early 2025, Gensler led about 100 cases against crypto firms to protect people from fraud, focusing on exchanges and big players rather than just new tokens. Even the SEC had tightened crypto rules under him.
That was a tough time for the crypto industry, with situations such as Ethereum’s shift to proof of stake, FTX’s collapse, and multiple SEC enforcement actions against exchanges. The exchange also noted potential record losses of other senior officials, raising concerns about the SEC’s recordkeeping practices.
Coinbase seeks court sanctions
Coinbase has contended that the SEC’s failure to search 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, and this dispute highlights ongoing tensions.
Legal experts note that courts view evidence destruction seriously, especially post-request, with sanctions ranging from additional searches to limiting court arguments. However, intent matters, and judges assess whether the loss was deliberate.
Coinbase is pushing for accountability, arguing the SEC should not benefit from the loss of key communications. The court is expected to rule on the next steps in the coming weeks.
Also Read: SEC’s Crypto Task Force Meets with SIFMA to Discuss Regulations
