The Securities and Exchange Commission has settled a Freedom of Information Act lawsuit brought by Coinbase, agreeing to pay $150,000 in attorney fees and release two previously withheld documents. The settlement, announced by Coinbase Chief Legal Officer Paul Grewal on Sunday, also requires the agency to review its policies for preserving text messages and other electronic communications. The SEC has not officially confirmed the settlement as of press time.
A $150,000 settlement and two documents
Coinbase sued the SEC in 2024 after the agency denied requests for internal communications about its approach to crypto regulation. Under the settlement, the SEC will hand over two documents it had previously withheld. The $150,000 payment covers Coinbase's legal costs. The settlement does not include any admission of wrongdoing by the SEC.
The SEC's own record-keeping problem
The case exposed an awkward irony. The SEC has fined banks and financial institutions billions of dollars for failing to preserve employee communications, including text messages. Yet during the FOIA litigation, the SEC disclosed that some texts involving former Chair Gary Gensler and other senior officials were automatically deleted and unavailable for FOIA requests. That admission undercut the agency's own enforcement posture.
Coinbase's long-running FOIA fight
Coinbase first requested the documents in 2023, seeking insight into how the SEC was thinking about crypto regulation. When the agency refused, Coinbase sued. The case dragged on for over two years. The settlement comes as the SEC continues to face criticism from crypto firms over what they call regulation by enforcement. Coinbase itself is still fighting an SEC enforcement action filed in 2023.
What happens next
The SEC has agreed to review its policies on preserving text messages and electronic communications. It's not clear how long that review will take or whether it will lead to new internal rules. The two documents the SEC will release have not been made public yet. Coinbase said it expects to receive them within 30 days. The SEC did not respond to a request for comment on the settlement.
