WSJ: US SEC settles FOIA suit with Coinbase over lost messages

• The SEC, which polices corporate record-keeping, automatically wiped certain data including text messages from former Chair Gary Gensler and other officials
• Coinbase originally sued the SEC and FDIC in 2024 seeking documents that would allegedly show a coordinated effort by regulators to eliminate crypto companies
• The settlement comes amid broader victories for Coinbase under the Trump administration, including dismissal of a major SEC lawsuit and passage of a stablecoin bill

Summary

Coinbase has settled a Freedom of Information Act (FOIA) lawsuit against the U.S. Securities and Exchange Commission regarding missing agency records, according to the company's Chief Legal Officer Paul Grewal in a Wall Street Journal op-ed published July 22.

Key Details:

• The SEC will pay Coinbase $150,000 and reform its record-retention policies as part of the settlement
• The lawsuit centered on lost text messages between former SEC Chair Gary Gensler and other officials, which the agency said were "automatically wiped" through certain data processes
• Coinbase originally filed suit against the SEC and FDIC in 2024, seeking documents allegedly showing a coordinated regulatory effort to eliminate crypto companies

Market Context:

The settlement represents another significant win for Coinbase in its regulatory battles. Under the Trump administration, the company has secured favorable outcomes, including:

• Dismissal of a major SEC lawsuit filed during the Biden presidency
• Support for a stablecoin bill passed by Congress

The SEC is reportedly developing more crypto-friendly policies, including potential regulations allowing crypto companies to offer blockchain-based stocks.

Implications:

This settlement highlights ongoing tension between crypto firms and regulators over transparency and record-keeping. The case is particularly notable as it involves the SEC—an agency responsible for policing corporate record-keeping—losing its own internal communications. The outcome signals a shifting regulatory landscape more favorable to cryptocurrency companies under current U.S. leadership.