Coinbase has secured what it describes as a major victory in its campaign for greater government transparency after reaching a Freedom of Information Act (FOIA) settlement with the U.S. Securities and Exchange Commission (SEC).
The agreement requires the regulator to pay a $150,000 award and revise its internal record-retention practices.
Coinbase Chief Legal Officer Paul Grewal said the settlement is a significant step toward holding federal regulators accountable.
Missing communications
According to Grewal, the lawsuit sought records related to communications among senior SEC officials, including former Chair Gary Gensler, during the agency's crackdown on digital asset companies.
The SEC acknowledged that numerous text messages between Gensler and other officials had been lost, attributing the disappearance to an automated system that erased the data. Grewal has argued that the explanation has contrasted sharply with the SEC's own enforcement actions against financial firms for record-keeping failures.
"The SEC's excuse rings hollow," Grewal wrote, noting that the regulator has previously imposed billions of dollars in penalties on financial institutions for similar compliance shortcomings.
The missing records reportedly span the period between April 2021 and January 2025. Back then, the SEC launched plenty of enforcement actions.
"Americans have a right to know when their government oversteps or rigs rules in secret," Grewal wrote. "Our FOIA wins weren't just about a threat to crypto, but to the democratic principles of government accountability and transparency."
Second FOIA Win for Coinbase
The SEC settlement follows another legal victory Coinbase secured earlier this year against the Federal Deposit Insurance Corporation (FDIC).
That case led to the release of documents showing that the FDIC instructed nearly two dozen banks to pause cryptocurrency-related activities. The initiative has been widely referred to by critics as "Operation Choke Point 2.0."
According to Coinbase, the FDIC had publicly denied the existence of such a coordinated campaign in 2023. However, the documents released following the lawsuit prompted congressional hearings.
The SEC has dismissed its enforcement lawsuit against Coinbase that was initiated during the Biden administration, while Congress has passed stablecoin legislation strongly supported by the exchange.
Dan Burgin
U.Today Editorial Team
