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Coinbase is intensifying its conflict with US authorities regarding earlier communications involving former Securities and Exchange Commission Chair Gary Gensler.
On Thursday, Coinbase submitted a legal motion seeking a hearing to discuss the SEC Office of the Inspector General’s probe, which revealed that the agency erased nearly one year’s collection of text messages from Gensler and other high-ranking officials due to “avoidable” mistakes.
The cryptocurrency exchange asserted that the SEC must clarify why it failed to perform a comprehensive search of agency records, including messages from Gensler and senior SEC executives, when it requested these communications in multiple Freedom of Information Act (FOIA) submissions from 2023 and 2024.
As stated in the motion, Coinbase seeks to compel the SEC through the court to locate and produce all relevant communications initially requested, which includes all messages and documents from Gensler and the agency pertaining to Ethereum’s transition to proof-of-stake (PoS) consensus. The FOIA submission stated:
This Court’s intervention is necessary to ascertain whether the SEC has indeed breached the Court’s previous directives and to guarantee that all feasible steps are taken to preserve and present responsive records.
Additionally, the exchange suggested another hearing after the materials have been provided and examined during legal discovery to address further remedies such as attorney fees, if required.
“Following discovery, the parties can then return to the Court, where the Court will determine the suitable additional remedial actions at that time,” including findings that could “initiate a Special Counsel investigation.”
Representatives for the SEC informed Cointelegraph that transparency is “essential” to the agency’s operations and its accountability to taxpayers.
“When Chairman Atkins was informed about this matter, he promptly instructed staff to investigate and fully comprehend what transpired and to implement measures that will avert a recurrence,” stated the SEC spokesperson.
Crypto firms have long insisted on clarity from the SEC concerning its communications related to enforcement actions against crypto initiatives, which resulted in a migration of companies from the United States.
Related: SEC chair states most tokens are not securities, supports ‘super-app’ platforms
The SEC deleted almost one year’s worth of messages that Coinbase sought
The SEC lost nearly one year’s collection of Gensler’s text messages from October 2022 to September 2023, as per the SEC Inspector General’s investigative report.
According to the investigation, Gensler’s messages were automatically erased by the SEC’s IT department before the messages could be backed up.
The SEC filed a lawsuit against Coinbase in 2023, claiming that the exchange breached US securities regulations by operating as an unlicensed securities broker, an allegation the SEC made against numerous crypto firms during Gensler’s tenure.
In retaliation, Coinbase requested that US courts mandate the SEC to release Gensler’s private email correspondence, arguing that the former SEC chair’s personal communications would be a crucial resource for its legal conflict with the SEC.
Magazine: Godzilla vs. Kong: SEC faces tough battle against crypto’s legal strength
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