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.
Chief legal officer Paul Grewal disclosed the deal in a Wall Street Journal op-ed on Wednesday.
Under the terms, Grewal wrote, the SEC will pay $150,000 and repair its record-retention policies.
The story behind the settlement is what gives it weight. Coinbase filed FOIA requests in 2023 for records that might show how the SEC decided to treat crypto as securities, the same question at the center of the enforcement suit the agency brought against the company that June.
Rather than hand over the files, the SEC denied the requests, and the case dragged into court.
The SEC’s own inspector general found that close to a year of former Chair Gary Gensler’s text messages, from October 2022 to September 2023, had been wiped after the agency reset his phone before a backup was made.
That window covered the collapse of FTX and the agency’s hardest push against crypto exchanges. The watchdog found that 38% of the recovered texts touched agency business, including a May 2023 exchange on the timing of enforcement against trading platforms.
SEC should play by the same rules: Coinbase
Grewal built his case on a point that needs no legal training to feel. Under Gensler, the SEC had levied more than $1 billion in fines on financial firms for losing employee messages, and had said “everybody should play by the same rules.”
Yet it lost its own chair’s texts during the most consequential stretch in crypto’s short history. “The Gensler SEC destroyed documents they were required to preserve and produce,” Grewal wrote when the report landed. “We now have proof from the SEC’s own Inspector General.”
For Coinbase, the value was never the documents alone. The company had cast its transparency suits, including a challenge to the SEC and FDIC over pressure on crypto’s banking access, as proof that regulators leaned on the industry without clear rules. The SEC’s own case against Coinbase fell away in early 2025 under a new administration and a new chair.
The settlement doubles as a personal coda. Grewal, the lawyer who steered Coinbase through years of combat with the SEC, plans to leave the company at the end of July.
He closes this chapter with a small check, a promise of better filing habits, and a story the industry will carry for a long time: that the recordkeeping enforcer could not keep its own records.
