The U.S. Securities and Exchange Commission reached a settlement with Coinbase on Wednesday, ending a years-long legal dispute over the agency's handling of records requests tied to the prior administration. The settlement resolved Coinbase's 2024 lawsuit accusing the SEC of failing to comply with Freedom of Information Act requests. Coinbase Chief Legal Officer Paul Grewal stated in a Wall Street Journal op-ed that former SEC Chair Gary Gensler waged a "litigation campaign against the industry," during which the SEC sued Coinbase and several other crypto firms for allegedly failing to comply with federal securities registration requirements.
SEC Agrees to Pay $150,000 and Release Withheld Documents
Under the settlement terms, the SEC agreed to pay $150,000 to History Associates for attorney fees and release two documents that had been withheld. The agency also agreed to conduct a review of its records and how it preserves text messages, according to the court filing. History Associates, Inc., a consultant firm working with Coinbase, assisted in making the FOIA requests that led to the lawsuit.
Coinbase Filed Two FOIA Lawsuits in 2024 Against Federal Regulators
In 2024, Coinbase filed two lawsuits — one against the SEC and another against the Federal Deposit Insurance Corporation — for not complying with Freedom of Information requests. In the complaints, Coinbase, through History Associates, accused the regulators of trying to cut off the crypto industry from the banking sector. In its case against the SEC, Coinbase asked for information about how the agency views ether as well as information about other investigations. Grewal said the victories have lasting consequences: "FDIC and SEC are rewriting disclosure and records retention practices, which will improve transparency and limit the ability of agencies to overreach behind closed doors again in the future."
FDIC Issued Pause Letters to Financial Institutions Between March 2022 and May 2023
As for the FDIC, Coinbase sent FOIA requests on the agency's "pause letters." The FDIC began issuing "pause letters" between March 2022 and May 2023 to some financial institutions, asking them to not expand crypto-related activities and provide more information. The FDIC settled with Coinbase in February.
FAQ
What did the SEC agree to in the settlement with Coinbase?
The SEC agreed to pay $150,000 to History Associates for attorney fees, release two documents that had been withheld, and conduct a review of its records and how it preserves text messages.
Why did Coinbase file lawsuits against the SEC and FDIC in 2024?
Coinbase filed the lawsuits because the SEC and FDIC did not comply with Freedom of Information Act requests. Coinbase accused the regulators of trying to cut off the crypto industry from the banking sector.
What were the FDIC pause letters?
The FDIC issued "pause letters" between March 2022 and May 2023 to some financial institutions, asking them to not expand crypto-related activities and provide more information about their crypto operations.
