Coinbase Reaches Settlement with SEC, SEC to Pay $150,000 and Revise Record-Keeping Policy

Coinbase has reached a settlement with the U.S. Securities and Exchange Commission (SEC), with the SEC agreeing to pay $150,000 and revise its record-keeping policy. The lawsuit revealed that the SEC had lost nearly a year’s worth of communications from former Chairman Gary Gensler and other senior officials during a peak period of enforcement in the cryptocurrency industry. Coinbase had previously requested documents from the SEC regarding how it applies securities laws to digital assets, but was denied, leading to the lawsuit which received court support. The SEC stated that some text messages were lost due to an automated data deletion process. Coinbase's Chief Legal Officer Paul Grewal pointed out that the SEC has previously imposed billions of dollars in fines on financial institutions for similar record-keeping issues. In February of this year, Coinbase also reached a settlement with the Federal Deposit Insurance Corporation (FDIC) regarding another Freedom of Information Act lawsuit, which disclosed that the FDIC had required nearly twenty banks to suspend cryptocurrency-related activities since 2022. This led to congressional hearings and a court ruling that the FDIC violated federal law. Grewal stated that both lawsuits revolve around government transparency and due process, emphasizing that the American public has the right to know whether regulators are restricting legitimate cryptocurrency businesses from accessing banking services through non-public means.

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