SEC agrees to pay $150,000 to settle Coinbase lawsuit over deleted texts
The US Securities and Exchange Commission will pay $150,000 in legal fees to resolve a two-year dispute with Coinbase over deleted internal records, marking a significant shift in regulatory relations under the current administration.
The US Securities and Exchange Commission has agreed to pay $150,000 in legal fees to settle a two-year lawsuit filed by Coinbase. The agreement, filed on Wednesday, concludes the crypto exchange’s legal push to obtain internal agency documents and uncover evidence of what it called "crypto by enforcement" during the previous administration's regulatory crackdown.
The dispute centered on the SEC's failure to preserve internal communications. A 2025 internal watchdog report revealed that the regulator lost nearly a year of text messages from former chair Gary Gensler and other officials due to what it termed "avoidable errors."
Coinbase chief legal officer Paul Grewal highlighted the irony of the situation in a Wednesday Wall Street Journal op-ed. “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,” Grewal wrote, adding that the regulator has since fixed its retention policies.
This resolution underscores the broader transformation of US crypto regulation under the Trump administration. SEC chair Paul Atkins has adopted a more industry-friendly posture, dropping several major enforcement actions against digital asset firms throughout 2025. For investors, this regulatory thaw reduces legal overhangs for major exchanges and signals a more predictable compliance environment for institutional capital entering the digital asset space.
The SEC settlement follows a February victory against the Federal Deposit Insurance Corporation, which paid $188,440 in legal fees after a court found it violated the Freedom of Information Act. Grewal noted on X that the litigation successfully uncovered dozens of crypto pause letters, providing indisputable proof of a coordinated effort to sideline the industry.
As the legal battles wind down, Grewal is preparing to step back from his daily operational role. The executive, who has served as chief legal officer since 2020, will move to an advisory position on July 31.
Coinbase legal vice presidents Molly Abraham and Ryan VanGrack will fill the resulting leadership gaps. Abraham is set to become the new general counsel, while VanGrack will take on the role of vice chair.
