The SEC has agreed to pay Coinbase $150,000 in attorney fees to settle a Freedom of Information Act lawsuit that centered on missing text messages. The settlement, reached by late July 2026, also requires the SEC to produce two previously withheld documents and commit to an internal review of its record-retention practices — specifically around text message preservation.
Coinbase's chief legal officer, Paul Grewal, had publicly pressed the issue. In a Wall Street Journal op-ed, Grewal wrote that the SEC had 'automatically wiped' certain data, a claim that became central to the FOIA dispute.
The FOIA fight over missing texts
The case began when Coinbase filed a FOIA request seeking SEC communications about crypto policy. The exchange wanted to see how the agency was shaping rules that affect billions in market value. But the SEC couldn't produce many of the requested messages — they were gone.
Prior findings from the agency's Inspector General had flagged the missing texts. Those findings were directly tied to the settlement, indicating that the wiped messages were a key reason the FOIA case dragged on. The SEC has historically enforced recordkeeping rules against other firms for off-channel communications lapses, including WhatsApp and text messages. Now the agency was on the other side of that same issue.
What the settlement includes
Under the terms, the SEC will pay $150,000 to cover Coinbase's attorney costs. That's a relatively small sum, but the real win for Coinbase is the two documents the SEC agreed to hand over. The agency also committed to an internal review and improvement of its record-retention practices, specifically regarding text message preservation.
The timing isn't great for the SEC. It has spent years fining Wall Street banks and crypto firms for failing to keep off-channel communications. Now it's paying a settlement over its own missing texts.
Coinbase's transparency argument
Coinbase framed the entire dispute around transparency. The exchange argued the public has a right to see how crypto policy is made, especially given the market impact. Grewal's op-ed drove that point home: if the SEC can't keep its own records, how can it hold others accountable?
The settlement doesn't resolve that broader question. But it does force the SEC to look inward.
The SEC will now conduct its internal review of record-retention practices. No timeline has been set. Coinbase gets the two documents it fought for, though it's unclear what they contain. The $150,000 check is already written.
The bigger question — whether the SEC will change how it handles text messages going forward — won't be answered until that review is done. For now, the case is closed.
