SEC to Pay Coinbase $150,000 Over Lost Gensler Text Messages

The missing communications, spanning from October 2022 to September 2023, were lost due to what an SEC Inspector General report identified as avoidable technical errors. Agency staff performed a factory reset on Gensler’s government-issued iPhone without completing a functional backup, permanently erasing data during a critical period of aggressive crypto enforcement actions. The Office of Inspector General concluded that standard recordkeeping procedures, had they been followed, would have prevented the loss.

Coinbase Chief Legal Officer Paul Grewal noted that the agency destroyed documents it was legally required to produce. The exchange had been seeking these records to understand how senior officials navigated crypto regulation and potential coordination with other agencies, such as the Federal Deposit Insurance Corporation. Beyond the financial penalty, the settlement mandates that the SEC revise its protocols to ensure official communications are properly archived. The oversight failure extended to other staff as well, with the agency later discovering similar issues in retrieving messages from the devices of five other senior officials.