Coinbase has settled its Freedom of Information Act lawsuit against the U.S. Securities and Exchange Commission, closing a years-long dispute over records tied to how the agency approached crypto regulation and, more specifically, over text messages from former Chair Gary Gensler that the SEC said were destroyed.
Paul Grewal, Coinbase’s chief legal officer, disclosed the agreement in a Wall Street Journal op-ed published Wednesday. Under the settlement terms described by Grewal, the SEC will pay $150,000 and repair its record-retention policies.
FOIA requests grew out of the SEC’s crypto securities stance
The lawsuit began with FOIA requests Coinbase filed in 2023. The company sought records that might show how the SEC decided to treat crypto assets as securities, the same issue that sat at the center of the enforcement case the agency brought against Coinbase in June of that year.
Instead of producing the records, the SEC denied the requests, and the dispute moved into court.
Inspector general report detailed the loss of Gensler’s texts
What gave the settlement broader significance was the agency’s own internal findings. The SEC’s inspector general found that nearly a year of Gary Gensler’s text messages, covering October 2022 through September 2023, had been wiped after the agency reset his phone before a backup was made.
That period included the collapse of FTX and the SEC’s most aggressive stretch of pressure on crypto exchanges.
The watchdog also found that 38% of the recovered text messages involved agency business. Among them was a May 2023 exchange about the timing of enforcement action against trading platforms.
Coinbase says the SEC should be held to the same standard
Grewal framed the dispute around a straightforward point. During Gensler’s tenure, the SEC had imposed more than $1 billion in fines on financial firms over lost employee communications and had maintained that everyone should follow the same rules.
Yet the agency lost its own chair’s text messages during what the article described as one of the most consequential periods in crypto’s short history.
When the inspector general’s report came out, Grewal wrote, “The Gensler SEC destroyed documents they were required to preserve and produce. We now have proof from the SEC’s own Inspector General.”
Part of a broader transparency fight
For Coinbase, the value of the case was not limited to obtaining documents. The company has presented its transparency lawsuits, including its challenge to the SEC and the Federal Deposit Insurance Corporation over pressure on crypto’s access to banking services, as evidence that regulators pressed the industry without clear rules.
The SEC’s own enforcement case against Coinbase was dropped in early 2025 under a new administration and a new chair.
A closing chapter before Grewal’s exit
The settlement also serves as a personal coda for Grewal, who has led Coinbase through years of conflict with the SEC. According to the article, he plans to leave the company at the end of July.
He leaves this chapter with a $150,000 settlement, a commitment from the SEC to improve its recordkeeping practices, and a story likely to remain with the industry: the regulator that penalized others over record retention failed to preserve its own records.