SEC Agrees to Overhaul Recordkeeping After Settling Coinbase Lawsuit Over Gensler's Lost Texts

The U.S. Securities and Exchange Commission agreed to overhaul aspects of its recordkeeping after settling a Coinbase Freedom of Information Act lawsuit tied to “lost texts” during Gary Gensler’s tenure. The dispute began in 2023 when the regulator pursued the largest U.S.-based crypto exchange, and then reversed a year later when Coinbase, using its research firm History Associates, sued after the SEC denied internal-communication requests about how it built its crypto enforcement approach. Coinbase argued the records could illuminate legal theories behind multiple high-profile SEC lawsuits, and the fight intensified when the SEC disclosed certain texts involving Gensler and other officials had been automatically deleted. As part of the settlement, the SEC agreed to pay $150,000 in attorney fees, release two previously withheld documents, and review policies governing how it presents text messages and other electronic communications, though the SEC had not publicly confirmed details as of press time.