Coinbase Sued the SEC — The Agency Just Agreed to Pay $150,000 to Settle the Case

Cryptocurrency exchange Coinbase (COIN) settled its Freedom of Information Act lawsuit against the US Securities and Exchange Commission (SEC) on Wednesday, with the agency agreeing to pay $150,000 in legal fees to close the case. 

The settlement, reported by Reuters and confirmed by Coinbase’s outgoing chief legal officer Paul Grewal in a Wall Street Journal op-ed, marks one of the largest FOIA awards in the SEC’s history — and comes with a disclosure that will likely fuel ongoing debate about the agency’s conduct during Gary Gensler’s tenure.

Coinbase Won the Case 

The settlement revealed that the SEC lost text messages between Gensler and other senior officials after a process the agency said automatically wiped certain data. 

Coinbase had originally filed the lawsuit in 2024 seeking communications from senior SEC officials, including Gensler himself, at what the exchange described as the height of the agency’s campaign against the crypto industry. The records were never produced. 

Grewal, who announced his departure from Coinbase earlier this month, said, “The SEC deleted a full year of Gary Gensler’s communications at the peak of his campaign against crypto,” he wrote on X, adding:  

The FDIC [Federal Deposit Insurance Corporation] tried to secretly cut off an entire lawful industry from the banking system and buried the evidence. The US government doesn’t get to operate like this.

He added that both the SEC and the FDIC are now rewriting their disclosure and records retention practices as a result of the litigation — a consequence he described as the most lasting outcome of the cases.

CEO Brian Armstrong tied the outcome directly to a broader argument about government accountability. “If regulators can secretly debank an entire lawful industry, no business is safe,” he wrote. “This win is not only for us, but for every American, and every American company expecting transparency and accountability from the government.”

Coinbase CEO Calls the CLARITY Act Ready 

Wednesday also brought news that Armstrong responded to on a separate but related front. Senate Republicans released the updated draft text of the CLARITY Act — the crypto market structure bill that Armstrong has been publicly backing for months. 

🚨BREAKING: Senate Republicans just released the updated CLARITY Act text. Ethics bans on officials and their spouses. Blind trusts required. DOJ enforcement. New law enforcement section. FTX-style bankruptcy protections. Full breakdown on CryptoDepth 👇https://t.co/8KKTh2wDTH

— CryptoDepth (@CryptoDepthIO) July 22, 2026

He called it a genuine bipartisan compromise built on “thousands of hours” of negotiation on both sides and said it arrives at exactly the right moment. “The status quo in the US isn’t working,” he wrote. 

There’s no federal framework, so bad actors like FTX can harm US customers and much of the industry has gone offshore totally outside US purview. This bill fixes that with strong consumer protections, real tools for law enforcement, and a path for America to lead in this industry.

Armstrong pointed to polling showing 70% of American voters believe the US should have already passed comprehensive crypto legislation, and closed with a call to action — “Let’s finish this.” 

Featured image generated with OpenArt.