SEC settles Coinbase FOIA suit over crypto records

• Key takeaway: Coinbase sued the Securities and Exchange Commission and the Federal Deposit Insurance Corp. in 2024, alleging the agencies attempted to hinder the crypto industry.
• Expert quote:  "These settlements are testaments to what our industry had to endure for years — an uphill battle for fair treatment from regulators." —Coinbase General Counsel Molly Abraham
• What's at stake: The Securities and Exchange Commission pledged to improve its disclosure and records retention practices to improve transparency going forward.

WASHINGTON — The Securities and Exchange Commission agreed to pay $150,000 to digital asset firm Coinbase, settling a Freedom of Information Act lawsuit the company filed two years earlier.

As part of the settlement announced on July 22, the SEC will update its record retention policies after the agency lost communications from the previous administration related to the agency's crypto enforcement decisions and communications. 

Coinbase had also sued the Federal Deposit Insurance Corp. in federal court in Washington in 2024, alleging the agency sought to discourage banks from doing business with crypto companies. The FDIC settled that lawsuit in February.

The firm said in a statement on X that the government had tried to hinder the crypto industry and that the two lawsuits were intended to bring that unfair treatment to light.

In its June 27, 2024, complaint, Coinbase alleged the SEC failed to clearly explain which digital assets it considers securities or how companies could comply with existing securities laws. The company argued its FOIA request was intended to counter what it described as "administrative opacity."

"The industry has been left with little way to understand the SEC's sweeping and ill-defined power grab," the complaint states. "Instead it has been left to guess at why the SEC thinks it has the power it is asserting, and what the SEC sees as the outer limits of that jurisdiction. FOIA was designed to help counteract this kind of a government in the shadows."

In its lawsuit against the FDIC, Coinbase sought records related to what it alleged was an effort by the agency to discourage banks from serving crypto companies, including so-called pause letters sent to banks.

The FDIC issued the letters between March 2022 and May 2023, directing several banks to pause planned or ongoing crypto-related activities and provide additional information about those projects, according to the agency's office of inspector general.

"The pause letters are part of a deliberate and concerted effort by the FDIC and other financial regulators to pressure financial institutions into cutting off digital-asset firms from the banking system," Coinbase wrote in its complaint.

With both lawsuits now settled, Coinbase General Counsel Molly Abraham said the outcomes were "a testament to what our industry had to endure for years — an uphill battle for fair treatment from regulators."

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The tide has shifted significantly for the crypto industry under the Trump administration.Lawmakers and regulators have introduced a flurry of changes aimed at more fully integrating crypto companies into the financial system.

Among those efforts is the CLARITY Act, legislation that would establish a regulatory framework for digital assets. Congress also passed the GENIUS Act last year, which created the first federal regulatory framework for payment stablecoins.