In a bold courtroom escalation, Coinbase is demanding answers from the U.S. Securities and Exchange Commission after an internal probe revealed the agency wiped out nearly a year’s worth of text messages from ex-Chair Gary Gensler and top brass—messages the crypto giant desperately sought in its ongoing legal showdown. Filed on Thursday, the motion accuses the SEC of dodging full record searches in response to Freedom of Information Act requests, sparking fresh cries for transparency in the regulator’s crypto crackdown.
The Deleted Messages That Sparked the Fury
Picture this: October 2022 to September 2023, a pivotal period when the SEC under Gensler was ramping up its assault on the crypto world, including a blockbuster lawsuit against Coinbase for allegedly peddling unregistered securities. That’s exactly when the agency’s IT crew auto-deleted Gensler’s texts before any backups could save them, labeling it an “avoidable” blunder in a scathing Inspector General’s report. Coinbase isn’t buying the oopsie excuse. Their motion slams the SEC for half-hearted FOIA responses, ignoring pleas for Gensler’s comms on everything from Ethereum’s proof-of-stake pivot to broader enforcement tactics. “This Court’s intervention is warranted to determine whether the SEC has in fact violated the Court’s prior orders,” the filing blasts, pushing for a full dredge of hidden docs.
Coinbase’s High-Stakes Push for Justice
This isn’t just about old texts—it’s a direct shot at the heart of Gensler’s legacy. Coinbase wants the court to force the SEC’s hand, producing every scrap of responsive material, including private emails that could expose the inner workings of the crypto witch hunt. And they’re eyeing round two: a follow-up hearing post-discovery to hash out remedies like attorney fees or even a Special Counsel probe if violations stick. The exchange’s legal salvo comes amid a mass exodus of crypto firms fleeing U.S. shores, fed up with opaque enforcement that treats tokens like ticking time bombs. As one industry insider quipped, it’s “Godzilla vs. Kong” out there—the SEC’s regulatory roar clashing with crypto’s legal muscle.
SEC’s Tepid Defense Amid Broader Backlash
The SEC, ever the picture of bureaucratic poise, insists transparency is “paramount” to its taxpayer-funded ops. A spokesperson revealed that new Chair Atkins—briefed on the mess—ordered a deep dive to unpack the deletions and bolt down safeguards against future fumbles. Yet, with Gensler out and whispers of a friendlier crypto stance under Atkins (who’s floated that most tokens aren’t securities and cheered “super-app” innovations), this flap could signal a turning tide. For Coinbase, fighting a 2023 suit that paints it as an unlicensed broker, these vanished words aren’t just evidence—they’re the smoking gun in a battle for the soul of U.S. crypto regulation.