The U.S. Securities and Exchange Commission will pay $150,000 and revise its record-retention policies to settle a Coinbase-backed Freedom of Information Act lawsuit over communications involving former Chair Gary Gensler.
History Associates filed the case in June 2024 on Coinbase’s behalf after the agency withheld records requested from senior SEC officials. The settlement ends the dispute after the agency acknowledged that text messages from Gensler’s government-issued phone were lost through an automated device-wiping process. Paul Grewal disclosed the settlement terms in a Wall Street Journal opinion article published Wednesday.
The deleted records covered communications sent and received between Oct. 18, 2022, and Sept. 6, 2023, a period that included heightened SEC scrutiny of cryptocurrency exchanges and other digital asset companies.
Coinbase had previously sought sanctions over the destroyed SEC communications, arguing that the missing records damaged public trust and could affect outstanding information requests.
Factory Reset Erased Gensler’s Messages
The SEC’s Office of Inspector General found that Gensler’s phone stopped communicating with the agency’s mobile-device management system in July 2023 while continuing to operate normally.
An automated policy later marked the device for an enterprise wipe because it appeared inactive. SEC information technology staff then performed a factory reset without preserving the phone’s data, permanently deleting nearly 11 months of messages.
The agency had not backed up the device since October 2022. The inspector general’s review attributed the loss to avoidable errors involving device monitoring, backup procedures, change controls and the handling of phones assigned to senior officials.
The report recommended stronger backup verification, mobile-device inventories, audit-log retention and management approval before factory resets involving senior officials’ devices. Several corrective measures remained incomplete in the inspector general’s spring 2026 update.
Coinbase Records Second FOIA Settlement
The SEC agreement follows Coinbase’s separate records dispute with the Federal Deposit Insurance Corporation over supervisory letters sent to banks considering crypto services.
The FDIC agreed in February to pay $188,440 in legal fees and end its attempt to broadly withhold the documents. The released records included 25 “pause letters” sent to 24 financial institutions, directing banks to delay or limit planned cryptocurrency and blockchain activities.
That settlement required the FDIC to revise parts of its disclosure process after a federal court rejected its blanket approach to withholding supervisory records. Coinbase’s FOIA win over the crypto pause letters brought the two agency settlements to $338,440 in combined payments.
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