Coinbase Moves to Court Over Missing SEC Text Messages from Former Chair Gensler
Coinbase has intensified its legal dispute with the U.S. Securities and Exchange Commission (SEC) by filing a motion seeking a court hearing to address the agency’s failure to comply with Freedom of Information Act (FOIA) requests. The motion targets the SEC’s Office of Inspector General (OIG) investigation that revealed the deletion of nearly a year’s worth of text messages from former SEC Chair Gary Gensler and other senior officials.
Background on Deleted Communications
The OIG report uncovered that from October 2022 to September 2023, the SEC’s information technology department inadvertently deleted Gensler’s text messages before they could be backed up. Coinbase argues the SEC has not conducted an exhaustive search of its records, including these missing messages, despite multiple FOIA requests submitted in 2023 and 2024.
Legal Motion Demands Full Disclosure
In its motion filed Thursday, Coinbase requests the court compel the SEC to produce all communications responsive to its FOIA requests, including documents and messages related to Gensler and the agency’s deliberations on Ethereum’s transition to a proof-of-stake (PoS) consensus mechanism. The exchange emphasized the need for judicial intervention to determine whether the SEC violated prior court orders and to ensure preservation and disclosure of all relevant records.
Coinbase also proposed a follow-up hearing after discovery to discuss potential remedies, including attorney fees and the possibility of triggering a Special Counsel investigation if warranted.
SEC Responds to Transparency Concerns
An SEC spokesperson told Cointelegraph that transparency remains a cornerstone of the agency’s mission and accountability to taxpayers. The spokesperson noted that Chair Gary Gensler’s successor, Chair Gary Gensler, directed staff to thoroughly examine the circumstances surrounding the message deletions and implement safeguards to prevent future occurrences.
Context: Regulatory Pressure on Crypto Firms
Coinbase’s FOIA lawsuit and subsequent motion come amid ongoing regulatory scrutiny of cryptocurrency companies. The SEC sued Coinbase in 2023, alleging it operated as an unregistered securities broker—a charge common during Gensler’s tenure. Crypto firms have repeatedly called for greater transparency from the SEC regarding enforcement communications, citing regulatory uncertainty as a factor driving some companies out of the U.S.
FinOracleAI — Market View
The legal motion filed by Coinbase highlights growing tensions between crypto firms and U.S. regulators over transparency and regulatory oversight. The missing text messages and the SEC’s handling of FOIA requests may raise concerns about regulatory accountability, potentially affecting investor confidence in crypto markets.
While this development introduces legal uncertainty, it does not immediately alter Coinbase’s operational fundamentals. Market participants should monitor further court rulings and any resulting regulatory reforms or enforcement actions that could impact the broader crypto ecosystem.
Impact: neutral
