The U.S. financial regulatory body, the SEC, is under scrutiny following the release of an internal audit. The review indicated that text messages from former Chairman Gary Gensler appear to have been permanently deleted between the fall of 2022 and the late summer of 2023.
The agency’s internal watchdog has verified the irreversible deletion of these records, sparking debate about the SEC’s protocols for managing and safeguarding vital communication data.
The SEC states that its policy involves the automatic wiping of government-issued mobile devices if they are not connected to the internal network for a period exceeding 45 days.
Curious fact:
Join our community – We release new, easy-to-understand crypto videos weekly!
What is Aurora in Crypto? NEAR Protocol Token Explained (ANIMATED)
As a result, Coinbase is petitioning a federal court located in Washington, D.C., to impose penalties on the SEC, expedite the discovery process, and mandate the release of any outstanding documentation.
Coinbase, in its legal submission, argues that the destruction of these messages has inflicted irreparable damage and has requested the court to put an end to what they describe as a “destroy-and-delay” tactic.
The company also highlighted instances of dispute involving the Freedom of Information Act. Initially, the SEC denied Coinbase’s requests, citing exemptions connected to law enforcement activities. This position shifted after Coinbase filed a lawsuit in June of the current year.
Coinbase claims that the SEC possessed the means to process or, at the very least, safeguard these records in 2023, had it conducted searches in a more timely manner.
Chief Legal Officer Paul Grewal stated on social media platform X that the SEC “destroyed materials they were legally obligated to retain and provide”, citing the Inspector General’s findings as key evidence.
In related news, a coalition of global regulators and exchange organizations has recently implored the SEC to establish a clear regulatory framework for tokenized stocks. To discover what they requested, read the complete report.