Coinbase Demands Sanctions Against SEC Over Lost Gensler Texts
Coinbase has requested sanctions against the SEC due to its 'destroy-and-delay approach to records'. The request comes after a discovery that nearly a year of text messages from former SEC Chair Gary Gensler's smartphone were lost. A district court has ordered all parties to appear on October 8 to address the deletion of the texts.
The lost messages span from October 2022 through September 2023, a period marked by aggressive crypto enforcement by the SEC under Gensler's leadership. House Republicans are investigating the incident, coordinating with the Inspector General to examine whether other senior officials' communications were similarly lost and whether internal controls protect federal records.
Under Gensler's tenure, the SEC launched an industry-wide regulatory assault following FTX's collapse in November 2022. However, an Office of the Inspector General report found that IT staff failures and poor policies led to the permanent deletion of the messages. Gensler's staff initially claimed he used his phone for administrative reasons, but the review found substantive, mission-related communications.
The SEC has since undergone a transformation with the appointment of Paul Atkins, a crypto advocate, as the new Chair. The agency insisted the crypto industry's business model was 'built on non-compliance' and authorized over 100 enforcement actions against crypto firms. The upcoming court appearance on October 8 is expected to shed more light on the circumstances surrounding the lost messages.
