Settlement Ends Years-Long Records Battle

Coinbase has reached a settlement with the Securities and Exchange Commission in its Freedom of Information Act lawsuit, resolving a dispute centered on the agency's failure to preserve internal communications. The agreement requires the SEC to pay $150,000 in attorney fees and implement changes to how it manages and retains official records.

The exchange initiated FOIA requests in 2023 seeking documents related to the SEC's approach to cryptocurrency regulation and enforcement decisions. When the agency did not fully comply, Coinbase pursued legal action in federal court.

Missing Messages from Critical Period

The case gained significance after revelations that nearly a year of text messages from former SEC Chair Gary Gensler, spanning October 2022 to September 2023, were permanently deleted. This timeframe included major events such as the FTX collapse and intensified regulatory actions against crypto platforms.

An investigation by the SEC's Office of Inspector General determined the loss resulted from avoidable technical issues, including a factory reset of Gensler's government-issued phone without a complete prior backup. The watchdog noted that 38 percent of recovered related messages from other officials pertained to agency business.

Policy Reforms and Irony Highlighted

As part of the settlement, the SEC will revise its record-retention policies, including permanently disabling automatic deletion features on devices used by senior officials. The agency had previously enforced strict standards on financial firms for similar recordkeeping lapses, often imposing significant fines.

Coinbase Chief Legal Officer Paul Grewal detailed the terms in a Wall Street Journal op-ed published on July 22, 2026. The company had argued that regulators must adhere to the same transparency rules they impose on others.

Broader Context of Regulatory Scrutiny

The FOIA litigation formed part of Coinbase's efforts to obtain clarity on regulatory decision-making processes. The exchange had also filed suit against the Federal Deposit Insurance Corporation over related banking access concerns. That matter was resolved earlier in 2026.

The settlement follows the dismissal of the SEC's enforcement action against Coinbase in early 2025 under new leadership. Grewal, who played a central role in the company's legal defenses, is set to depart at the end of July.