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SEC Settles FOIA Lawsuit with Coinbase Over Missing Records

Photorealistic header showing a FOIA settlement document with SEC and Coinbase logos, Ethereum dissolving into binary.

The Securities and Exchange Commission (SEC) has reached a settlement to resolve a Freedom of Information Act (FOIA) lawsuit involving missing internal records and communications. According to a joint status report filed on July 22 in the U.S. District Court for the District of Columbia, the federal regulator has agreed to pay $150,000 in legal fees and produce remaining documents sought by the plaintiffs.

The legal challenge was initiated in June 2024 by History Associates Inc., a firm acting on behalf of Coinbase. The lawsuit followed three public records requests submitted the previous year that sought clarity on the SEC’s internal investigations into Ethereum (ETH), specifically regarding its transition to a proof-of-stake consensus mechanism and previous enforcement actions.

Coinbase Chief Legal Officer Paul Grewal noted in a Wall Street Journal op-ed that the litigation uncovered significant gaps in the agency’s records. Discovery in the case revealed that the SEC had lost approximately a year’s worth of text messages and data from the mobile devices of senior officials, including former Chair Gary Gensler. The agency reportedly attributed the loss of data to an automatic wiping process.

Settlement Terms and Procedural Status

Under the terms of the agreement, the SEC will fulfill several requirements to conclude the dispute:

  • Financial Payment: The agency will pay a flat fee of $150,000 to cover the legal costs incurred by the plaintiff.
  • Document Production: The SEC must hand over all remaining records responsive to the initial FOIA requests. This includes communications evaluated by agency leadership regarding Ethereum’s migration from proof-of-work to proof-of-stake.
  • Policy Adjustments: The settlement includes a commitment from the SEC to improve its internal record-retention policies to prevent future data loss.

The court had previously ordered the SEC to prioritize the production of records involving Gary Gensler’s communications. The case is expected to be formally dismissed once the agency completes the final delivery of the required documents.

The settlement marks a procedural conclusion to a specific transparency dispute, though it does not resolve the broader, ongoing litigation between the SEC and Coinbase regarding the exchange’s core operations and the regulatory status of digital assets. The missing records discovered during this FOIA case have drawn attention from industry participants regarding the consistency of federal record-keeping during active regulatory investigations.