On Sept. 11, Coinbase’s chief legal officer Paul Grewal announced that the company had intensified its legal dispute with the U.S. Securities and Exchange Commission (SEC), pointing to a watchdog report that confirmed extensive lapses in record-keeping. Grewal shared the update on the social media platform X:
The Gensler SEC destroyed documents they were required to preserve and produce. We now have proof from the SEC’s own Inspector General. Today we ask the federal court to address this gross violation of public trust to ensure that it never happens again.
His remarks coincided with a status report filed by History Associates, acting on Coinbase’s behalf, in the U.S. District Court for the District of Columbia.
According to a Sept. 3 report from the SEC Office of Inspector General (OIG), nearly a year of former Chair Gary Gensler’s text messages—from October 2022 through September 2023—were permanently deleted under a new device-wiping policy. The missing communications span the period of FTX’s collapse and the SEC’s ramped-up enforcement against crypto firms, including Coinbase. “The SEC OIG report last week revealed texts from October 2022–September 2023 were destroyed. 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,” Grewal wrote.
The filing contends that the SEC failed to meet its FOIA obligations, waited until April and June 2025 to conduct searches, and acknowledged that many officials’ devices could not be backed up. The OIG further reported that text messages from at least 21 senior SEC officials may already be irretrievable, with roughly 40 more devices still at risk. Texts recovered from third parties indicated substantive discussions about pending enforcement actions, settlements, and crypto-related speeches—contradicting earlier claims that Gensler used text messages solely for administrative purposes.
Coinbase is now seeking remedies. As Grewal put it:
We want expedited discovery, sanctions, and immediate production of all responsive texts. Considering the double-standards of the previous Chair it’s not surprising that the same agency that fined firms billions for record-keeping failures committed the exact same violations.
The company argues that the SEC’s handling of records has eroded transparency, noting the irony that the agency has fined private firms more than $1 billion for similar lapses while failing to uphold the same standards internally. Pro-crypto advocates maintain that regulators must be held to equivalent accountability measures to safeguard public confidence in financial oversight.
