SEC pays Coinbase $150K over Gensler's vanished texts
The SEC has settled Coinbase's FOIA lawsuit for $150,000 and agreed to overhaul its record-retention policies after admitting it destroyed nearly a year of former Chair Gary Gensler's text messages.
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Coinbase has settled its Freedom of Information Act lawsuit against the Securities and Exchange Commission, closing a years-long fight that came to rest on a batch of text messages the agency admits it destroyed. A Wall Street Journal op-ed written by Coinbase Chief Legal Officer @iampaulgrewal disclosed the agreement on July 22.
What the Settlement Covers
As part of the settlement, the SEC agreed to pay $150,000 to History Associates for attorney fees and agreed to release two documents that had been withheld, as well as conduct a review of its records and how it preserves text messages, according to a court filing.
The SEC said that nearly one year of Gary Gensler's text messages, covering October 2022 through September 2023, had been wiped out, blaming an automatic system that erased data from government-issued devices. An SEC watchdog blamed avoidable IT failures and a factory reset for the loss. The SEC must now update its record-retention policies and permanently disable any automatic deletion features on government-issued devices used by senior officials.
A Broader Pattern of Legal Wins for Coinbase
Coinbase sued the SEC and the Federal Deposit Insurance Corp. in 2024, seeking documents it said would show a concerted effort by U.S. regulators to stamp out crypto companies. The lawsuit sought additional communications from senior SEC officials, including Gensler.
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. In his Wall Street Journal op-ed, @iampaulgrewal said former SEC Chair Gary Gensler waged a "litigation campaign against the industry."
@coinbase has scored major wins from the SEC under President Donald Trump, including the dismissal of a major lawsuit the regulator brought against the company under President Joe Biden. The FDIC also settled with Coinbase in February.
Sources:
The Block: SEC reaches settlement with Coinbase over records requests from Gensler era
Crypto News: Gary Gensler's erased texts cost SEC $150K in Coinbase case
Bitcoin Magazine: Coinbase Settles FOIA Fight With the SEC
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Crypto RichRich has been researching cryptocurrency and blockchain technology for eight years and has served as a senior analyst at BSCN since its founding in 2020. He focuses on fundamental analysis of early-stage crypto projects and tokens and has published in-depth research reports on over 200 emerging protocols. Rich also writes about broader technology and scientific trends and maintains active involvement in the crypto community through X/Twitter Spaces, and leading industry events.