📰 What happened?

A report from the SEC's Inspector General revealed that the text messages of Gary Gensler (former SEC chair) sent and received between October 2022 and September 2023 were lost.

These messages cover a key period during which significant events occurred in the crypto world: the collapse of the FTX exchange, multiple regulatory actions (enforcing) against exchanges, including against Coinbase.

It is alleged that the deletion occurred when an official phone of Gensler was reset (“factory reset”) after being disconnected from the SEC's internal network for a determined period, which triggered an automatic deletion policy after inactivity.

Coinbase filed a legal motion on 11 September 2025 demanding that the federal court require the SEC to produce all responsible text messages, that an “expedited discovery” be conducted, sanctions against the SEC if applicable, and that measures are taken to ensure that something similar does not happen again.

#SEC

⚖️ What implications does this have?

Transparency and trust: The nature of the lost communications is key to understanding regulatory decisions that impact the crypto market. The loss of messages from a leading official raises concerns about the SEC's transparency. Coinbase argues that if the agency imposes strict standards for record-keeping and data retention on others, it must apply them to itself as well.

Legality under FOIA: The Freedom of Information Act requires federal agencies to preserve certain records and provide them in response to legitimate requests. If the SEC failed to comply, it could be violating its own legal obligations.

Potential sanctions: Coinbase is seeking formal sanctions, for example, that there be legal consequences if negligence or mismanagement of records by the SEC is proven.

Regulatory impact: This could force the SEC to enhance its communication preservation policies, backups, official devices, automatic deletion management, etc. It may also affect how the legal community views certain past cases that relied on communications that may now be under scrutiny.