Coinbase has formally requested court-imposed sanctions against the U.S. Securities and Exchange Commission (SEC) following revelations that the regulatory body failed to preserve nearly a year of text messages from former Chairman Gary Gensler. The cryptocurrency exchange alleges that the SEC’s inability to maintain these records constitutes a serious breach of legal preservation obligations, potentially undermining the integrity of ongoing litigation.
In court filings, Coinbase’s legal team argued that the lost communications—spanning a critical period of regulatory development—could have contained material evidence relevant to their case. The exchange contends that the SEC’s failure to implement adequate record-keeping protocols has prejudiced their defense and demonstrates disregard for judicial transparency.
The motion for sanctions represents an escalation in the ongoing legal confrontation between Coinbase and the SEC, which has accused the platform of operating as an unregistered securities exchange. Legal experts suggest that if granted, sanctions could significantly impact the proceedings, potentially leading to adverse inferences against the regulator’s position.
This development highlights growing tensions between cryptocurrency entities and federal regulators, emphasizing concerns about accountability and procedural compliance within government agencies overseeing digital asset markets.
