SEC Transparency Boosted
Coinbase and SEC Settle FOIA Dispute, SEC Pays $150K and Reforms Record-Keeping
Anonymous
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The SEC will pay $150,000 in attorney fees to History Associates and will release two documents it had previously withheld as part of the settlement.
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As part of reforms, the SEC will review and revise its record-preservation practices, including how it stores and preserves official text messages and related records.
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The case centers on the destruction of former Chair Gary Gensler's text messages from October 2022 to September 2023 after the agency reportedly reset his phone prior to backup, a disclosure Coinbase says underscored a broader record-keeping failure.
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Investigators found that about 38% of the recovered texts touched agency business, including a May 2023 exchange about the timing of enforcement actions against trading platforms.
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Coinbase’s FOIA disputes also touch the Financial Stability aspect of crypto regulation, as the FDIC issued 'pause letters' between 2022 and 2023 cautioning banks about crypto activities, with Coinbase having previously settled a FOIA suit against the FDIC that year regarding those letters.
The U.S. Securities and Exchange Commission has agreed to pay $150,000 and overhaul its record-keeping practices to settle a Freedom of Information Act lawsuit brought by Coinbase, according to The Block. The deal ends a years-long legal fight over records from the Gary Gensler era — and forces the agency to release two documents it had previously refused to hand over.
The settlement is a rare public win for a crypto company against a federal regulator. Coinbase Chief Legal Officer Paul Grewal called it a meaningful step toward accountability. Benzinga reported the SEC will also revise how it stores and preserves official text messages going forward.
Gensler's Deleted Texts Sit at the Center
The lawsuit was sparked by a damaging disclosure: the SEC had destroyed former Chair Gary Gensler's text messages. The agency reset his phone before backing it up, wiping texts from October 2022 through September 2023. Coinbase argued this was not a minor mishap — it was a record-keeping failure that hid how the agency ran its crypto crackdown.
Investigators who recovered some of the lost texts found that about 38% touched agency business. That included a May 2023 exchange about the timing of enforcement actions against crypto trading platforms. Crypto Economy reported that the content of those messages raised fresh questions about how Gensler coordinated his aggressive push against the industry.
SEC Pays $150,000 and Rewrites Its Own Rules
Under the settlement, the SEC will pay $150,000 in attorney fees to History Associates, the consultant firm that filed the original records request. The agency will release two documents it had withheld and must review and update how it preserves text messages and other official records, according to Benzinga.
The policy overhaul is arguably the bigger prize. Forcing a federal regulator to change its internal practices is rare. Grewal framed the reforms as lasting wins for transparency — not just for crypto, but for anyone who wants to know how regulators make decisions behind closed doors.
Coinbase Already Beat the FDIC on Similar Grounds
The SEC deal is not Coinbase's first FOIA victory. The company previously settled a separate lawsuit against the Federal Deposit Insurance Corporation. That fight centered on so-called 'pause letters' — documents the FDIC sent to banks between 2022 and 2023 warning them to slow or stop crypto-related activities, according to Crypto Economy.
Coinbase sued to make those letters public. The FDIC settled and released them. The letters showed regulators had quietly pressured banks to distance themselves from crypto — a practice critics called informal regulation without any public debate or legal process.
Coinbase Stock Jumps as Transparency Wins Stack Up
Markets noticed. Coin Paper reported that Coinbase shares rose roughly 11% following the SEC settlement news, adding about $4.2 billion to the company's market value. Investors are betting that a more transparent — and less hostile — regulatory environment is taking shape in Washington.
The two settlements together tell a bigger story. Coinbase used public records law as a weapon to expose how federal agencies treated crypto during the Gensler years. Seeking Alpha noted the SEC deal marks the close of a legal chapter that began in 2024 — and sets new expectations for how regulators must handle their own records.
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