Coinbase has renewed its legal battle against the SEC by filing a lawsuit to recover deleted messages from former chairman Gary Gensler. This case could impact the image of a regulator known for its hostility towards the crypto ecosystem.
Lawsuit Against SEC
Coinbase's Chief Legal Officer, Paul Grewal, has raised concerns in a court filing that the SEC has destroyed documents it was required to preserve. The lawsuit specifically mentions the deletion of Gensler's messages as an act of negligence on the part of the regulator.
Investigation Details
According to an inspector general's report published on September 3, the SEC reset Gensler's smartphone to factory settings, permanently deleting nearly a year’s worth of texts from October 2022 to September 2023. This timeframe covers critical events such as the FTX collapse and increased prosecutions of crypto companies, including Coinbase.
Regulatory Landscape and Implications
The inspector general's report clearly states that these messages could have been preserved, but the SEC's IT department chose to delete them. Such actions raise severe questions about the transparency of the regulator's actions towards the crypto industry. Coinbase argues that this constitutes a blatant breach of public trust.
The circumstances surrounding the deletion of Gensler's messages further complicate matters for the SEC and raise transparency issues in its operations. The outcome of Coinbase's legal battle could have significant implications for the balance of power between regulators and the crypto industry.
