Coinbase Takes Legal Action Against SEC Over Deleted Text Messages
Coinbase recently took a bold step by filing a federal court motion demanding accountability from the Securities and Exchange Commission (SEC) after it was revealed that nearly a year of text messages from former Chair Gary Gensler had been deleted during the agency’s crypto enforcement campaign. The motion, filed on Sept. 11, seeks expedited discovery, sanctions, and immediate production of all responsive communications.
The SEC’s Office of Inspector General released a report on Sept. 3, confirming the deletion of Gensler’s texts from October 2022 through September 2023. This period coincided with significant events in the crypto industry, including the collapse of FTX and multiple enforcement actions against companies like Coinbase.
The deletion of these text messages came to light after Coinbase submitted Freedom of Information Act (FOIA) requests seeking all communications related to crypto regulatory decisions. Paul Grewal, Coinbase’s chief legal officer, expressed his concerns on social media, stating, “The Gensler SEC destroyed documents they were required to preserve and produce. We now have proof from the SEC’s own Inspector General.”
The court filing by Coinbase alleged that the SEC had violated multiple judicial orders by failing to produce communications between Gensler and other officials regarding Ethereum’s regulatory status. Despite court directives to provide all documents and communications, the agency’s productions did not include any text messages, and there was no indication that text messages were even searched.
Furthermore, the SEC only conducted text message searches in April and June 2025, months after claiming compliance with court orders. The agency reported that no responsive texts were found, citing technical limitations affecting the devices of dozens of senior officials.
The Inspector General’s report revealed that 38% of the recovered Gensler texts were related to mission-related communications, including discussions about crypto enforcement. This contradicted claims that Gensler only used texts for administrative purposes. One specific conversation in May 2023 involved Gensler, his staff, and the Enforcement Division Director discussing the timing of actions against crypto trading platforms.
Coinbase’s legal representative, History Associates, highlighted that 40 additional senior SEC officials were at risk of losing text messages due to backup system failures. The filing requested emergency intervention to prevent further destruction of documents.
This legal battle between Coinbase and the SEC raises questions about transparency and accountability within regulatory agencies. The outcome of this case could have far-reaching implications for how regulators handle communication and document preservation in the future.