Coinbase Wins FOIA Case as SEC Agrees to Pay $150K and Reform Recordkeeping

The U.S. Securities and Exchange Commission (SEC) has agreed to pay Coinbase $150,000 after settling a Freedom of Information Act (FOIA) lawsuit that exposed missing internal records from the agency. The court also forced the SEC to change how it saves official messages after important texts from former SEC Chair Gary Gensler were found missing.

Coinbase Forces SEC Into FOIA Settlement

Coinbase has settled with the SEC after suing the regulator over its refusal to release internal records related to its crypto policies.

Coinbase Chief Legal Officer Paul Grewal confirmed that the SEC will pay $150,000 to settle the lawsuit. More importantly, the agency has agreed to change how it keeps official records after admitting that important communications from former SEC Chairman Gary Gensler and other senior officials were deleted.

The dispute started after Coinbase filed FOIA requests, seeking internal communications that it believed could reveal how federal agencies handled crypto regulation behind closed doors.

When the SEC failed to provide the records, Coinbase took the agency to federal court.

Missing Gary Gensler Messages Created a Big Blunder

During the court proceedings, when a federal judge told the SEC to hand over its internal messages about crypto policies. The SEC said that nearly one year of Gary Gensler’s text messages, covering October 2022 through September 2023, had been wiped out. 

The SEC blamed an automatic system that erased data from government-issued devices.

Later, the SEC’s own Inspector General found that the agency did not include officials’ text messages when answering FOIA requests. 

Coinbase used this finding against the SEC in court. 

Ironically, the SEC had earlier fined many Wall Street companies billions of dollars for not saving employee text messages, but it failed to follow the same rules itself.

What Else is in the Settlement?

The settlement goes beyond the $150,000 payment. The SEC must now update its record retention policies and permanently disable any automatic deletion features on government issued devices used by senior officials.

This comes just a few months after the SEC dropped its lawsuit against Coinbase under the acting SEC Chair Mark Uyeda. 

coinbase coinbase Coinbase is one of the leading cryptocurrency exchanges known for making digital asset trading secure, easy, and accessible for everyone. Founded by Brian Armstrong and Fred Ehrsam in 2012, the company allows users to buy, sell, and trade cryptocurrencies. Coinbase supports a wide range of cryptocurrencies and provides advanced features like secure trading, crypto holding management, and native blockchain transactions.   Key Features of Coinbase:   Users can purchase, exchange, and manage cryptocurrencies, including Bitcoin and Ethereum. Advanced trading tools for professional traders. A self-custody crypto wallet known as the Coinbase wallet, now available as the Base app. Users can earn rewards on staked cryptocurrencies. Prime brokerage, including costs, trading, and custody for institutions. APIs and on-chain solutions for developers.   Coinbase Milestones:   Year Achievements 2012 Founded by Brian Armstrong and Fred Ehrsam in San Francisco and participated in the Y Combinator accelerator program. 2013 Funded by a $5 million Series A investment led by Union Square Ventures. 2014 Registered 1 million user wallets, demonstrating rapid adoption. 2015 Announced Coinbase Exchange (subsequently renamed GDAX and then Coinbase Pro) and became a regulated cryptocurrency platform in the United States. 2016 Moved away from being strictly a Bitcoin exchange by introducing Ethereum, which marked the start of the multi-cryptocurrency evolution 2017 Offered support for Litecoin and introduced Coinbase Custody, serving institutional customers. 2019 Announced Coinbase Prime as a product designed specifically for institutional clients, along with the acquisition of Xapo's institutional custody service. 2021 IPO with a direct listing at Nasdaq, achieving a market capitalization of over $85 billion. 2022 Rebranded Coinbase Pro to Coinbase Advanced Trade and acquired FairX, entering the crypto derivatives market. 2023 Launched Base, an Ethereum L2 network, and increased its global regulatory footprint. 2024 Gained necessary international regulatory licenses, such as a Major Payment Institution license in Singapore and MiCA compliance via Luxembourg. 2025 The SEC dismissed its lawsuits against Coinbase, the company completed the acquisition of Deribit, expanded its derivatives business, and strengthened institutional custody and European operations. support@coinbase.com WalletCentralised Exchange

paul grewal paul grewal at coinbase paul grewal Chief Legal OfficerDirector