Coinbase has taken a decisive step by filing a federal court motion to hold the Securities and Exchange Commission (SEC) accountable following a troubling revelation regarding former Chair Gary Gensler. The motion, submitted on September 11, demands expedited discovery, sanctions, and the immediate release of all communications related to the SEC’s enforcement actions in the cryptocurrency sector.
In a report released by the SEC’s Office of Inspector General on September 3, it was disclosed that Gensler’s text messages from October 2022 to September 2023—an impactful period marked by the collapse of FTX and multiple enforcement actions—had been deleted. Notably, this deletion occurred shortly after Coinbase had submitted Freedom of Information Act (FOIA) requests seeking comprehensive records on communications concerning crypto regulatory matters.
Paul Grewal, Coinbase’s chief legal officer, expressed grave concerns on social media, stating, “The Gensler SEC destroyed documents they were required to preserve and produce.” This claim is backed by findings from the SEC’s own Inspector General, raising significant questions about transparency and accountability in the agency’s decision-making processes.
The court filing alleges that the SEC breached several judicial orders mandating the production of communications between Gensler and other officials regarding Ethereum’s regulatory status. Despite the court’s requirement for “all documents and communications,” the SEC’s disclosures did not include any text messages and notably failed to indicate that text messages were even searched until much later, specifically in April and June 2025.
Additionally, the filing highlighted the inconsistency in the SEC’s practices, revealing that while the agency reported no responsive texts were found, it admitted that technical limitations had hampered the searches on dozens of senior officials’ devices.
The Inspector General’s findings notably revealed that a substantial portion—38%—of the retrieved text messages from Gensler concerned “mission-related communications.” This included discussions around strategic enforcement actions against cryptocurrency trading platforms. Grewal criticized this duality, pointing out that the SEC has imposed over $1 billion in fines on other financial institutions for similar recordkeeping failures during Gensler’s tenure, thereby raising concerns about a double standard in regulatory enforcement.
Furthermore, History Associates, representing Coinbase, pointed out that an estimated 40 other senior SEC officials are also at risk of losing text messages due to issues with the agency’s backup systems. The filing requests emergency intervention to ensure that no further destruction of documents occurs.
This legal challenge by Coinbase underscores the ongoing tensions between cryptocurrency firms and regulators amid an evolving landscape for digital asset oversight, emphasizing the need for consistency and accountability within regulatory frameworks.
