Coinbase Wins SEC FOIA Settlement Over Missing Records
In brief
- Coinbase secured FOIA settlement with SEC over missing communications from senior officials, including former Chair Gary Gensler
- SEC agreed to pay $150,000 and revise internal record-retention practices following the lawsuit
- Settlement follows Coinbase's earlier FDIC victory exposing what critics call Operation Choke Point 2.0
SEC Acknowledges Missing Records
The SEC acknowledged that numerous text messages between Gensler and other officials had been lost, attributing the disappearance to an automated system that erased the data. The missing records span the period between April 2021 and January 2025.
Coinbase Chief Legal Officer Paul Grewal argued that the SEC's explanation contrasted sharply with the regulator's own enforcement actions. The SEC has previously imposed billions of dollars in penalties on financial institutions for similar compliance shortcomings. The lawsuit sought records related to communications among senior SEC officials during the agency's crackdown on digital asset companies.
"Americans have a right to know when their government oversteps or rigs rules in secret" — Paul Grewal, Coinbase Chief Legal Officer
Building on Earlier Victories
This settlement follows another legal victory Coinbase secured earlier in 2025 against the Federal Deposit Insurance Corporation. That case led to the release of documents showing that the FDIC instructed nearly two dozen banks to pause cryptocurrency-related activities. The initiative has been widely referred to by critics as "Operation Choke Point 2.0."
According to Coinbase, the FDIC had publicly denied the existence of such a coordinated campaign in 2023. However, the documents released following the lawsuit prompted congressional hearings.
The regulatory environment has shifted. The SEC has dismissed its enforcement lawsuit against Coinbase that was initiated during the Biden administration. Congress has passed stablecoin legislation strongly supported by the exchange. Coinbase's legal strategy—forcing transparency through FOIA settlements and litigation—has yielded concrete results in both the courts and on Capitol Hill.
Frequently asked questions
Why did Coinbase sue the SEC over FOIA?
Coinbase sought records related to communications among senior SEC officials, including former Chair Gary Gensler, during the agency's crackdown on digital asset companies. The lawsuit aimed to expose what the exchange argued was a coordinated regulatory campaign conducted without public transparency.
What is Operation Choke Point 2.0?
Operation Choke Point 2.0 refers to an alleged coordinated campaign by the FDIC that instructed nearly two dozen banks to pause cryptocurrency-related activities. The FDIC had publicly denied the existence of such a campaign in 2023, but documents released after Coinbase's FDIC lawsuit proved otherwise, prompting congressional hearings.
How much did the SEC have to pay in the settlement?
The SEC agreed to pay Coinbase a $150,000 award and revise its internal record-retention practices. The settlement was reached after the regulator acknowledged that numerous text messages between senior officials had been lost due to an automated system.
