SEC to Pay Coinbase $150K After Lost Gensler Texts in Records Dispute

Settlement follows records loss

According to Coinbase Chief Legal Officer Paul Grewal, the settlement requires the SEC to compensate the company and revise how it preserves official communications. Coinbase had sought internal agency records as part of a broader fight over how senior SEC officials handled crypto policy.

The exchange had also sued the Federal Deposit Insurance Corporation in 2024 for documents it believed could show coordinated efforts by U.S. regulators to limit crypto firms’ access to banking services. In the SEC matter, the disputed records included messages exchanged between Gensler and other officials. Grewal said the agency attributed the loss to a process that automatically erased certain data, despite Coinbase’s request for communications related to crypto policy decisions.

Inspector General cited avoidable errors

A review released in September 2025 by the SEC Office of Inspector General found that preventable mistakes led to the disappearance of Gensler’s messages. The missing texts covered the period from Oct. 18, 2022, to Sept. 6, 2023, when the regulator was pursuing several digital-asset enforcement actions.

The Inspector General said SEC technology staff factory-reset Gensler’s agency-issued iPhone on Sept. 6, 2023, after he lost access to SEC applications. That reset permanently wiped the phone before staff had completed a usable backup. Although the Office of Information Technology backed up the device later the same afternoon, the watchdog found the messages could no longer be recovered.

The report said the loss could have been avoided through a timely backup and earlier steps to improve recordkeeping. It also described a broader technology policy issue inside the agency.

Texting policy and wider issues

According to the review, SEC technology staff had announced an initiative in October 2022 to disable texting on agency devices. Enforcement of that plan was delayed while the office worked on an exemption process and prepared for a possible government shutdown. As a result, Gensler’s phone did not receive another backup before the reset. The SEC ultimately removed the texting application from agency devices in March 2024.

A separate notice filed with the National Archives and Records Administration said the agency later identified problems searching for and recovering messages from SEC-issued phones used by five other senior officials.

After the Inspector General’s findings, Grewal accused the former SEC leadership of failing to meet its preservation obligations. In a September 2025 post, he said the agency had destroyed documents that it was required to keep and produce, even though Coinbase had requested “all communications” within the SEC tied to crypto regulatory and enforcement decision-making.

Long-running disclosure fight

The battle over SEC records had already surfaced in the regulator’s former enforcement case against Coinbase. In July 2024, Coinbase asked a federal court in New York to compel the SEC to produce documents related to Gensler’s internal discussions during his tenure, which began in 2021. After opposition from the SEC and U.S. District Judge Katherine Polk Failla, Coinbase narrowed an earlier request that had sought Gensler’s communications from both before and during his chairmanship.

Its July 23 motion centered on records from his time at the agency, including documents connected to Gensler’s public speeches on digital-asset regulation. Coinbase argued those materials were directly relevant to the SEC’s claims. The company also said the regulator had refused to search beyond Enforcement Division investigative files, would not search custodians’ email accounts broadly, and had not set up a process to produce responsive records or identify withheld documents.

Those disclosure demands arose while Coinbase was defending itself against SEC allegations that it operated as an unregistered securities exchange, broker, and clearing agency. The commission later dropped that enforcement case in February 2025 under the Trump administration, without requiring Coinbase to pay a fine or change its business practices.