Coinbase Says SEC Loss of Gensler Texts Could Weaken Enforcement, Seeks Sanctions and Ethereum Records

• SEC deleted nearly a year of Gensler’s texts (Oct 2022–Sep 2023)

• Coinbase requests sanctions, expedited discovery, and immediate production of responsive records.

• Inspector General flagged devices for 40+ senior officials; 21 devices confirmed or suspected of data destruction.

Gensler text messages deleted: Coinbase demands sanctions after SEC watchdog found nearly a year of texts erased—read what this means for enforcement and transparency.

What happened to Gary Gensler’s text messages?

Gensler text messages deleted refers to an Inspector General finding that nearly a year of texts from then‑Chair Gary Gensler were permanently erased between October 2022 and September 2023. Coinbase says this deletion harms transparency and is seeking sanctions and expedited discovery in federal court.

How did the SEC explain the deletions?

The SEC inspector general reported the agency uses a policy that remotely wipes devices disconnected from the agency network after 45 days. The report found deletions affecting Gensler’s device and flagged more than 40 senior officials’ devices, with 21 devices confirmed or suspected of data destruction.

Context and timeline: The deletion window overlaps major events including the FTX collapse and a period of intensified SEC crypto enforcement. Coinbase had filed FOIA requests for internal communications on digital asset policy, which the SEC initially withheld under law enforcement exemptions before abandoning that stance after litigation began in June 2024.

Why is Coinbase seeking sanctions and expedited discovery?

Coinbase argues that the SEC’s failure to preserve and produce relevant texts constitutes destruction of evidence that created irreparable harm to Coinbase’s FOIA claims. Through a third‑party historical research firm, Coinbase asked the U.S. District Court for the District of Columbia to impose sanctions, order expedited discovery, and compel immediate production of any responsive communications.

What are the potential legal and regulatory consequences?

Legal experts and industry sources say sanctions could set a precedent allowing defendants to challenge the SEC’s credibility in enforcement matters. That may delay enforcement actions, complicate settlements, and require the agency to defend its record‑keeping and evidence handling practices.

Frequently Asked Questions

Question: How did industry leaders react?

Industry voices called the deletions a “credibility crisis.” Coinbase Chief Legal Officer Paul Grewal publicly stated the SEC “destroyed documents they were required to preserve and produce.” Observers such as Rishabh Gupta and Shiv Pande noted the potential for weakened moral authority and increased legal challenges to SEC actions.

Key Takeaways

• Confirmed deletions: Inspector General found nearly a year of Gary Gensler’s texts were deleted (Oct 2022–Sep 2023).
• Broader impact: Devices from 40+ senior SEC officials were flagged; 21 devices confirmed or suspected of deletion.
• Legal response: Coinbase seeks sanctions, expedited discovery, and immediate production of responsive records.

How to preserve agency records when pursuing FOIA litigation (How‑to summary)

1. Issue immediate preservation notices to custodians. 2. Request court‑ordered preservation and expedited discovery. 3. Use third‑party historical research services to locate copies of deleted records. 4. Seek sanctions if deliberate destruction is evident.

Conclusion

The finding that nearly a year of Gary Gensler’s texts were deleted raises significant transparency and accountability concerns for the SEC. Coinbase’s request for sanctions and expedited discovery could shape future challenges to the agency’s enforcement posture and recordkeeping standards. Watch for court rulings that may set legal precedents on agency evidence preservation and FOIA compliance.

Author: COINOTAG | Published: 2025-09-12 | Updated: 2025-09-12