{"id":35171,"date":"2026-07-22T15:12:18","date_gmt":"2026-07-22T15:12:18","guid":{"rendered":"https:\/\/bitunikey.com\/news\/gary-genslers-erased-texts-cost-sec-150k-in-coinbase-case\/"},"modified":"2026-07-22T15:12:50","modified_gmt":"2026-07-22T15:12:50","slug":"gary-genslers-erased-texts-cost-sec-150k-in-coinbase-case","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/gary-genslers-erased-texts-cost-sec-150k-in-coinbase-case\/","title":{"rendered":"Gary Gensler\u2019s erased texts cost SEC $150K in Coinbase case"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">Coinbase has secured a $150,000 settlement from the U.S. Securities and Exchange Commission after the regulator lost nearly 11 months of former Chair Gary Gensler\u2019s text messages.<\/p>\n<div id=\"cn-block-summary-block_b4643156136a7b81826415396c5a078a\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>SEC will pay Coinbase $150,000 after losing Gary Gensler\u2019s crypto-related text messages.<\/li>\n<li>An SEC watchdog blamed avoidable IT failures and a factory reset for the loss.<\/li>\n<li>The settlement requires the regulator to revise its policies for preserving official communications.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<p>A <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/opinion\/coinbase-sues-the-sec-settles-dadfbee5?utm_source=chatgpt.com\" target=\"_blank\" rel=\"nofollow\">Wall Street Journal op-ed<\/a> written by Coinbase Chief Legal Officer Paul Grewal disclosed the agreement on July 22, bringing the exchange\u2019s Freedom of Information Act lawsuit against the agency to an end.<\/p>\n<p>Under the settlement, the SEC will pay Coinbase $150,000 and revise its record-retention policies, according to Grewal.<\/p>\n<p>Coinbase filed the case while seeking internal SEC records about how senior officials handled crypto regulation and enforcement. The exchange also sued the Federal Deposit Insurance Corporation in 2024 for documents that it believed could show coordinated attempts by U.S. regulators to restrict crypto companies\u2019 access to financial services.<\/p>\n<p>The disputed SEC records included messages exchanged between Gensler and other agency officials. Grewal wrote that the regulator attributed the loss to a process that \u201cautomatically wiped\u201d certain data, even though Coinbase had requested communications connected to crypto policy decisions.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<h2 class=\"wp-block-heading\">SEC failures erased months of records<\/h2>\n<p>A September 2025 review by the SEC Office of Inspector General found that avoidable errors caused the loss of Gensler\u2019s messages. The missing texts covered Oct. 18, 2022, through Sept. 6, 2023, a period when the agency was pursuing several enforcement actions involving digital assets.<\/p>\n<p>According to the Inspector General\u2019s report, SEC technology staff performed a factory reset on Gensler\u2019s agency-issued iPhone on Sept. 6, 2023, after he could no longer access SEC applications. The reset permanently deleted the phone\u2019s data before staff completed a usable backup.<\/p>\n<p>Although the Office of Information Technology backed up the device later that afternoon, the Inspector General found that the messages could no longer be recovered. The report concluded that a timely backup and earlier action to improve recordkeeping would have prevented the loss.<\/p>\n<p>SEC technology staff had announced an initiative to disable texting on agency devices in October 2022, according to the review. However, the office postponed enforcement while it developed an exemption process and prepared for a possible government shutdown, leaving Gensler\u2019s phone without another backup before the reset.<\/p>\n<p>The SEC eventually removed the texting application from agency devices in March 2024, the Inspector General reported. A separate <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/files\/072925-sec-unauthorized-disposition-notice-nara.pdf?utm_source=chatgpt.com\" target=\"_blank\" rel=\"nofollow\">notice submitted<\/a> to the National Archives and Records Administration also disclosed that the agency later found problems searching for and recovering messages from the SEC-issued phones of five other senior officials.<\/p>\n<p>Following the Inspector General\u2019s findings, Grewal accused the former SEC leadership of violating its public obligations by losing material Coinbase had sought. In a September 2025 post, the legal chief wrote that the agency destroyed \u201cdocuments they were required to preserve and produce.\u201d<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThe Gensler SEC did this even though we asked for information about \u2018all communications\u2019 within the SEC related to crypto regulatory and enforcement decision-making years ago.\u201d<\/p>\n<\/blockquote>\n<h2 class=\"wp-block-heading\">Coinbase\u2019s disclosure fight predates the settlement<\/h2>\n<p>Coinbase\u2019s pursuit of SEC communications had also appeared in the agency\u2019s former enforcement lawsuit against the exchange. In July 2024, Coinbase asked a New York federal court to compel the regulator to produce documents tied to Gensler\u2019s internal discussions during his tenure, which began in 2021.<\/p>\n<p>After resistance from the SEC and U.S. District Judge Katherine Polk Failla, Coinbase narrowed an earlier request that had covered Gensler\u2019s communications from both before and during his chairmanship. Its July 23 motion focused on records from his time leading the agency.<\/p>\n<p>Subpoena Request No. 23 sought documents connected to Gensler\u2019s public speeches about digital-asset regulation. Grewal argued at the time that those materials \u201cbear directly on the claims the SEC now asserts.\u201d<\/p>\n<p>According to Coinbase\u2019s motion, the SEC had declined to search beyond its Enforcement Division\u2019s investigative files, citing relevance and the burden involved. The exchange also claimed that the regulator would not run searches across custodians\u2019 email accounts or establish a system to produce responsive documents or list withheld records.<\/p>\n<p>Those requests emerged as Coinbase defended itself against SEC allegations that it operated an unregistered securities exchange, broker and clearing agency. Under the Trump administration, the commission dismissed the enforcement case in February 2025 without requiring Coinbase to pay a fine or change its business practices.<\/p>\n<p>As reported by crypto.news, Coinbase has since supported federal crypto legislation, including the stablecoin framework approved by Congress, while CEO Brian Armstrong and Grewal have pressed lawmakers to advance the CLARITY Act. The SEC has also started developing policies for tokenized securities and other digital-asset products under its post-Gensler leadership.<\/p>\n<p>The latest settlement resolves Coinbase\u2019s FOIA dispute while requiring the regulator to change how it preserves official communications. Grewal\u2019s account places the $150,000 payment alongside those recordkeeping reforms, tying the financial award directly to messages the Inspector General determined were lost through preventable agency failures.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Coinbase has secured a $150,000 settlement from the U.S. Securities and Exchange Commission after the regulator lost nearly 11 months of former Chair Gary Gensler\u2019s text messages. Summary SEC will&hellip;<\/p>\n","protected":false},"author":1,"featured_media":35172,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-35171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/35171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=35171"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/35171\/revisions"}],"predecessor-version":[{"id":35173,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/35171\/revisions\/35173"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/35172"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=35171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=35171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=35171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}