In a shocking twist that surprises absolutely no one, the SEC has managed to lose critical texts-because nothing says “trust us” like a government agency with the digital preservation skills of a goldfish. 🐠
SEC Caught Red-Handed (Or Maybe Just Empty-Handed)
Coinbase’s legal eagle, Paul Grewal, took to X (formerly Twitter, formerly sanity) on Sept. 11 to announce that the company was doubling down on its legal battle against the SEC. Why? Because the SEC’s own watchdog confirmed that they’ve been treating important texts like last year’s New Year’s resolutions-completely forgotten by February.
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.
Because nothing inspires confidence like a regulator who can’t even keep track of their own texts. Meanwhile, History Associates (Coinbase’s legal muscle) filed a report in court, presumably while muttering, “Seriously?” under their breath.
A Sept. 3 report from the SEC’s Office of Inspector General (OIG) revealed that nearly a year of Gary Gensler’s texts-Oct. 2022 to Sept. 2023-had been wiped clean, like a teenager’s browser history before Mom checks it. Coincidentally, this was right around the time FTX imploded and the SEC decided to go full crypto-cop mode. Grewal, ever the detective, noted:
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.
Because nothing says “transparency” like a federal agency playing digital hide-and-seek.
SEC’s Defense: “Whoops?”
The filing argues that the SEC failed spectacularly at its FOIA obligations, delayed searches until 2025 (because why rush?), and admitted that many officials’ devices couldn’t be backed up-like trying to save a Word doc on a typewriter. The OIG found that at least 21 senior SEC officials’ texts may already be lost, with another 40 devices at risk. Recovered texts from third parties showed discussions about enforcement actions and crypto speeches, proving Gensler’s earlier claim that texts were “just for admin stuff” was about as believable as a toddler denying they ate the last cookie.
Coinbase, smelling blood in the bureaucratic water, is now demanding:
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.
Because hypocrisy tastes best when served cold-preferably with a side of subpoenas.
The company argues that the SEC’s approach has undermined transparency, which is like saying a hurricane “undermines” a sandcastle. Pro-crypto advocates insist regulators should be held to the same standards as the firms they punish-because nothing says “justice” like watching the enforcers trip over their own rules. 🍿
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2025-09-13 08:58