GoCheckMyCrypto.comSEC Settles FOIA Suit With Coinbase Over Deleted Gensler Texts
The SEC agreed to pay $150,000 and produce remaining records to settle a two-year FOIA lawsuit filed by Coinbase, following disclosure that the agency deleted text messages from former Chair Gary Gensler and wiped 21 phones belonging to top officials. The case centered on SEC records related to Ethereum investigations and regulatory deliberations.
The SEC agreed to pay $150,000 and produce remaining records to settle Coinbase's two-year FOIA lawsuit, closing a case that exposed the agency's deletion of text messages from former Chair Gary Gensler and highlighted broader document-handling failures at the regulator. A joint status report was filed July 22 requesting dismissal after settlement terms were reached, according to CoinDesk reporting.
The lawsuit was initiated in June 2024 by History Associates Inc., working on behalf of Coinbase, after the SEC failed to fully respond to three public records requests submitted in 2023. Those requests sought documents on SEC investigations into Zachary Coburn and Enigma MPC, and records on how Ethereum shifted to proof-of-stake, per CoinDesk. The court explicitly ordered the SEC to prioritize all records and communications sent, received or evaluated by then SEC Chair Gary Gensler concerning Ethereum's migration from proof-of-work to proof-of-stake.
The SEC's Inspector General reported in September 2025 that the agency accidentally deleted Gensler's text messages from October 2022 to September 2023, the period spanning the core of the SEC's anti-crypto enforcement push. The agency simultaneously wiped 21 phones belonging to top officials, of which five belonged to the same staff members targeted in the Coinbase case, according to CoinDesk. The SEC disclosed the wiped phones to the National Archives in July 2025.
Brian Armstrong, Coinbase CEO, characterized the settlement as a huge win for crypto and tied it to an FDIC case involving buried evidence during the 2023 banking crisis. The lawsuit compelled the SEC to hand over thousands of documents, according to CoinDesk. The case will be formally dismissed once the SEC completes production of remaining records.
The $150,000 payment covers only the plaintiff's legal fees, not damages, meaning the SEC's destruction of evidence carries minimal financial penalty. The settlement does not reveal what specific communications were in the deleted texts or provide accountability for why Gensler's messages were lost. No explanation has been provided for how or why the 21 phones were wiped or what procedural failures allowed the deletions to occur.
The SEC settled Coinbase's FOIA lawsuit by agreeing to pay $150,000 and produce remaining responsive documents, per CoinDesk, after the agency's Inspector General revealed deletion of Gensler's texts from October 2022 to September 2023.
Watch for what the "remaining responsive documents" reveal about the SEC's deliberations on Ethereum's regulatory status during 2022-2023. The settlement's significance depends on whether the produced records answer substantive questions about the agency's enforcement rationale or merely confirm that key communications are irretrievably gone.
And that's the way it is.
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