SEC settles Coinbase suit over ‘text messages that disappeared’

The settlement follows a watchdog report last year that blamed “avoidable errors” for the loss of nearly a year’s worth of Gary Gensler’s text messages.

The US Securities and Exchange Commission agreed to pay $150,000 in legal fees to settle a Coinbase lawsuit seeking internal records from the agency at the height of the Biden-era SEC crackdown on crypto. 

The agreement, filed on Wednesday, ends a two-year lawsuit between the SEC and Coinbase, in which the crypto exchange sought internal documents from the regulator to uncover evidence of “crypto by enforcement.” An internal report in 2025 revealed the SEC had deleted nearly a year of former SEC Chair Gary Gensler’s texts due to “avoidable” errors. 

“The agency tasked with policing corporate record-keeping somehow lost reams of its own text messages between Mr. Gensler and other officials during the most intense period of the anti-crypto campaign,” said Coinbase chief legal officer Paul Grewal in an op-ed published by the Wall Street Journal on Wednesday, adding that the SEC will pay a $150,000 “award” and has fixed its record retention policies. 

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