SEC Pays Coinbase $150K to Settle FOIA Beef Over Gensler's Ghost Texts 👻

The U.S. Securities and Exchange Commission has agreed to pay $150,000 to settle a Freedom of Information Act lawsuit filed by Coinbase over internal agency records, according to a joint status report filed July 22 in the U.S. District Court for the District of Columbia. Coinbase chief legal officer Paul Grewal disclosed the settlement in a Wall Street Journal op-ed the same day, calling it another legal victory for the crypto exchange and confirming the SEC has fixed its record retention policies. History Associates Inc., a historical research firm working on Coinbase's behalf, and the SEC asked the court to dismiss the case once the agency produces the remaining responsive documents.

The lawsuit, filed in June 2024, stemmed from three public records requests Coinbase submitted the previous year. The filings sought SEC documents on investigations into Zachary Coburn and Enigma MPC, along with records on Ethereum's shift to a proof-of-stake system. The litigation forced the SEC to turn over thousands of documents and led a court to explicitly order the agency to prioritize all records and communications sent, received or evaluated by then-Chair Gary Gensler concerning Ethereum's migration from a proof-of-work blockchain to a proof-of-stake network.

The document fight stalled in September 2025 when the SEC's Inspector General reported that the agency accidentally deleted Gary Gensler's text messages from October 2022 to September 2023. Later court updates showed the agency wiped 21 phones belonging to top officials, of which five belonged to the same staff members targeted in the Coinbase case. The SEC notified the National Archives about the deleted phones in July 2025.

"The agency tasked with policing corporate record-keeping somehow lost reams of its own text messages between Mr. Gensler and other officials during the most intense period of the anti-crypto campaign," Grewal wrote in the op-ed. Coinbase CEO Brian Armstrong called the settlement a huge win for crypto. The agreement requires the SEC to pay the flat $150,000 fee to cover the plaintiff's legal fees and produce the remaining documents.

The SEC dismissed a separate enforcement lawsuit against Coinbase in early 2025 as the regulator shifted to developing crypto policy and regulations. Under Chair Paul Atkins, the agency has taken a more crypto-friendly approach and dropped several high-profile enforcement actions against crypto companies. In February, Coinbase reached a settlement with the Federal Deposit Insurance Corporation, with the FDIC agreeing to pay $188,440 in legal fees and revising aspects of its transparency practices after a federal court found it had violated the Freedom of Information Act.

Grewal, who has served as Coinbase's chief legal officer since 2020, is set to transition to an advisory role at the exchange starting on July 31, with Coinbase legal vice presidents Molly Abraham and Ryan VanGrack set to become general counsel and vice chair, respectively. $ETH and $BTC market figures were not part of the settlement disclosures.