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American cryptocurrency exchange Coinbase has escalated its legal battle with the U.S. Securities and Exchange Commission (SEC), citing a troubling deletion of nearly a year’s worth of text messages from former SEC Chair Gary Gensler. The exchange argues that this action represents a severe breach of public trust, prompting a federal court intervention.
Missing Texts Spark Legal Action
On September 11, Coinbase filed a motion through History Associates, referencing a September 3 report from the SEC Inspector General. The report revealed that the SEC excluded officials’ text messages while processing Freedom of Information Act (FOIA) requests. Coinbase claims this deletion covers communications critical to crypto regulatory decision-making and enforcement actions.
Paul Grewal, Coinbase’s Chief Legal Officer, emphasized the urgency of the matter, requesting “expedited discovery, sanctions, and immediate production of all responsive texts.” The deleted messages date from October 2022 to September 2023—a period when the SEC was intensively regulating crypto exchanges like Binance, Kraken, and Coinbase itself, alongside overseeing the fallout from FTX’s collapse.
The Gensler SEC destroyed documents they were required to preserve and produce. We now have proof from the SEC’s own Inspector General. Today we ask the federal court to address this gross violation of public trust to ensure that it never happens again. 1/3 pic.twitter.com/DPLtHUiolj
— paulgrewal.eth (@iampaulgrewal) September 11, 2025
Questions Over Regulatory Conduct
The deletion occurred after the SEC’s IT department performed a factory reset on Gensler’s device, permanently erasing data that could have been preserved, according to the Inspector General. Coinbase asserts that the missing texts are critical for understanding whether the SEC’s enforcement strategies were fair, justified, or overly aggressive in using public funds against crypto innovation.
The exchange also seeks transparency regarding the financial impact of regulatory actions taken during Gensler’s tenure, aiming to determine if public resources were misused in a disproportionate crackdown on the crypto industry.
Also Read: BlackRock Shifts $297M in Bitcoin and Ethereum to Coinbase
Ongoing Transparency Battle
Coinbase’s lawsuit against the SEC and the FDIC underscores a broader fight for accountability in crypto regulation. Beyond missing texts, the legal action touches on probes into Ethereum 2.0 and Operation Chokepoint 2.0, where federal agencies allegedly pressured banks to pause crypto-related activities. Despite offering to cover processing fees, Coinbase claims the SEC has repeatedly failed to provide complete information.
As Coinbase pushes for full disclosure, the case highlights growing tensions between crypto platforms and federal regulators. The outcome may set a precedent for transparency, enforcement limits, and the protection of digital asset innovation in the United States.
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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
