Coinbase (COIN) is taking its fight with U.S. regulators to the courts again, this time over deleted text messages from former SEC Chair Gary Gensler. The exchange has filed a legal motion demanding answers after the SEC admitted it wiped nearly a year of Gensler’s communications in what investigators called “avoidable” errors.
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Coinbase Files Motion to Force Transparency
On Thursday, Coinbase lawyers submitted a motion calling for a court hearing to review the SEC’s handling of Freedom of Information Act (FOIA) requests. The exchange argued that the regulator failed to conduct a proper search for records that should have included Gensler’s texts and other senior officials’ messages.
Coinbase said it specifically wanted all communications linked to Ethereum’s transition to proof-of-stake, a decision it believes could play a crucial role in its ongoing legal battle with the agency. The motion asked the court to not only compel the SEC to turn over all responsive materials but also consider further remedies, including attorney fees and even the appointment of a special counsel if the SEC’s actions are found to have violated court orders.
SEC Faces Scrutiny over Deleted Messages
The Inspector General’s report confirmed that nearly one year of Gensler’s texts, from October 2022 through September 2023, were lost after the SEC’s IT team allowed them to be auto-deleted before backups were saved. The report described the incident as avoidable, fueling accusations from Coinbase and others in the crypto sector that the regulator is withholding key information.
In a statement to media, the SEC insisted transparency is “paramount” and said Chair Paul Atkins, who succeeded Gensler, has ordered a review of the error and new measures to prevent it from happening again. Still, the admission is unlikely to calm tensions with crypto firms, many of which have accused the SEC of targeting the industry without providing clear rules of engagement.
Coinbase Escalates Fight with the Regulator
This latest dispute adds to Coinbase’s ongoing battle with the SEC, which sued the exchange in 2023 for allegedly acting as an unlicensed securities broker. Coinbase has argued that the regulator’s inconsistent communication and secretive decision-making drove companies out of the U.S., stifling innovation.
By pressing for Gensler’s deleted messages, Coinbase hopes to uncover whether his private communications contained insights into how the SEC made critical enforcement decisions. If successful, the motion could reshape the balance in Coinbase’s long-running standoff with U.S. regulators.
Is Coinbase Stock a Good Buy?
Turning to TipRanks, based on 28 analyst ratings for COIN stock over the past three months, the consensus stands at a Moderate Buy, with 14 analysts recommending a Buy, 12 sitting on Hold, and two advising Sell.
The average 12-month COIN price target lands at $376.14, which implies a potential upside of just over 16% from the recent price.
