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Coinbase is amplifying its conflict with US authorities regarding previous interactions involving ex-Securities and Exchange Commission Chair Gary Gensler.
On Thursday, Coinbase submitted a legal request seeking a hearing to discuss the SEC Office of the Inspector General’s probe, which revealed that the agency erased nearly a year’s worth of text messages from Gensler and other high-ranking officials due to “preventable” mistakes.
The exchange asserted that the SEC ought to clarify why it failed to perform a comprehensive search of agency records, including messages from Gensler and upper-level SEC officials, when it requested the messages in several Freedom of Information Act (FOIA) applications from 2023 and 2024.
As per the motion, Coinbase seeks for the court to mandate the SEC to search for and provide all pertinent communications initially requested, encompassing all messages and documents concerning Gensler and the agency relating to Ethereum’s transition to proof-of-stake (PoS) consensus. The FOIA filing stated:
This Court’s involvement is necessary to ascertain whether the SEC has indeed contravened the Court’s earlier decrees and to guarantee that all possible actions are taken to safeguard and produce relevant records.”
The exchange further suggested an additional hearing following the production and examination of materials during legal discovery to discuss supplementary remedies such as attorney fees, if required.
“After discovery, the involved parties can then revert to the Court, where the Court can decide the suitable extra remedial actions at that moment,” including findings that could “initiate a Special Counsel investigation.”
Representatives for the SEC informed Cointelegraph that openness is “essential” to the agency’s operations and its accountability to taxpayers.
“When Chairman Atkins was briefed on this issue, he promptly instructed staff to investigate and thoroughly understand what transpired and to implement measures that will stop it from occurring again,” the SEC spokesperson stated.
Cryptocurrency firms have long sought transparency from the SEC regarding its communications tied to enforcement activities against crypto initiatives, which resulted in a departure of companies from the US.
Related: SEC chair states most tokens are not securities, supports ‘super-app’ platforms
SEC erased nearly one year of messages that Coinbase pursued
The SEC lost close to one year’s worth of Gensler’s text messages from October 2022 to September 2023, as per the SEC Inspector General’s investigative report.
The messages from Gensler were automatically erased by the SEC’s IT department prior to the messages being backed up, according to the inquiry.
The SEC initiated legal action against Coinbase in 2023, alleging that the exchange breached US security regulations by functioning as an unlicensed securities broker, a claim the SEC made against numerous cryptocurrency firms during Gensler’s presidency.
In retaliation, Coinbase appealed to the US judiciary to compel the SEC to release Gensler’s private emails, contending that the former SEC chair’s personal communications would serve as a vital source of discovery for its legal struggle with the SEC.
Magazine: Godzilla vs. Kong: SEC encounters a vigorous battle against crypto’s legal might
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