Allegations of Deleted Texts: Coinbase Accuses SEC of Violating Public Trust

Coinbase cites a report from the Inspector General as proof that the U.S. Securities and Exchange Commission erased a year’s worth of text messages from former Chairman Gary Gensler. Even though, the firm claims the texts were supposed to be preserved.

Violation of Public Trust

In a recent post, the firm’s Chief Legal Officer, Paul Grewal, accused the federal agency under the previous chairman of violating public trust by deleting the documents. According to Grewal, the SEC destroyed “documents they were required to preserve and produce.” These actions have raised serious concerns about the agency’s transparency and accountability.

Deleted Text Messages

These documents include text messages that were sent and received by then-SEC Chairman Gary Gensler from October 2022 to September 2023. According to the Inspector General’s office, these text messages were “destroyed” when the agency’s IT staff “performed a factory reset of the smartphone.” This incident has sparked outrage and demands for explanation from the SEC.

Broader Implications

Gensler isn’t the only one affected by the alleged deletion of texts. In fact, Coinbase’s court order alleged that the same can has happened with more than 20 other high-ranking SEC officials’ texts may have also been erased upon the factory-reset carried out by the IT team. This revelation has significant implications for the ongoing investigations and lawsuits involving the SEC.

Demands for Action

“The Gensler SEC did this even though we asked for information about “all communications” within the SEC related to crypto regulatory and enforcement decision-making years ago,” wrote Grewal in his latest post. As a result, Coinbase is asking the Inspector General to do an “expedited discovery” to recover all the responsive texts. They are also demanding that the SEC face sanctions for deleting the texts.

Criticism of SEC’s Actions

“It’s not surprising that the same agency that fined firms billions for record-keeping failures committed the exact same violations,” said Grewal. This statement highlights the perceived hypocrisy of the SEC’s actions and the need for greater accountability within the agency.

FOIA Request and Court Order

Coinbase’s court order about the missing texts is part of the firm’s earlier request through a Freedom of Information Act lawsuit. Back in April 2025, Coinbase was able to obtain internal documents from the U.S. SEC, which included information about the agency’s probe into Ethereum 2.0. The documents obtained through this request have shed light on the SEC’s decision-making process and treatment of crypto assets.

Inconsistent Treatment of Crypto Assets

Most of the documents obtained by Coinbase are related to the federal agency’s probe into Ethereum 2.0, such as May 2022 internal analysis of ETH 2.0 under the Howey test, a February 2023 email questioning Ethereum’s security, and an April 2023 memorandum prepared for commissioners before authorizing the ETH 2.0 investigation. At the time, Grewal criticized the SEC’s inconsistent treatment of crypto assets, questioning why Ethereum passed the agency’s internal “ecosystem” test while others did not. This criticism underscores the need for clearer guidelines and more consistent regulation of the crypto industry.

Conclusion

The allegations of deleted texts and the SEC’s handling of crypto assets have significant implications for the industry and the public’s trust in the agency. As the situation continues to unfold, it remains to be seen how the SEC will respond to these allegations and what measures will be taken to prevent similar incidents in the future. Visit bitpulse for the latest updates on this developing story.