The US Securities and Exchange Commission (SEC) has agreed to pay $150,000 and hand over remaining documents to bring an end to a two-year legal dispute with Coinbase over missing messages linked to former chair Gary Gensler and the regulator’s handling of Ethereum.
The agreement, detailed in a new court status report, will resolve a Freedom of Information Act (FOIA) lawsuit brought in June 2024 by History Associates Inc., which acted on behalf of Coinbase. The complaint accused the SEC of failing to fully respond to requests for internal records relating to its investigations into Ethereum.
Under the settlement, the SEC will make a flat payment of $150,000 and complete the production of outstanding records. Once the final batch of documents has been delivered, the case will be dismissed.
Focus on Ethereum and proof-of-stake
The FOIA requests centred on the SEC’s scrutiny of Ethereum, particularly its transition from proof-of-work to a proof-of-stake consensus mechanism, and on earlier crypto enforcement actions involving the asset.
Coinbase sought to establish what senior SEC officials, including Gensler, knew and discussed internally about Ethereum during a period when the regulator’s stance on whether it should be treated as a security was under intense industry and market scrutiny.
The litigation forced the SEC to search across multiple systems and turn over thousands of pages of documents. During that process, it emerged that text messages and other data from the mobile phones of several top officials, including Gensler, had been deleted.
Those deletions became a flashpoint in the dispute, raising questions about record-keeping practices at the agency and whether relevant communications had been irretrievably lost.
Two-year fight draws to a close
The case has run alongside wider tensions between the SEC and major crypto platforms over regulatory oversight in the United States, with Coinbase among the most prominent critics of the agency’s approach.
Although the settlement does not alter any of the SEC’s substantive positions on Ethereum or other crypto assets, it brings to a close a prolonged battle over transparency surrounding its internal deliberations.
With the court now informed of the deal and the SEC committed to completing its document production, the lawsuit will be formally closed once the final records have been delivered, ending a contentious chapter in the regulator’s dealings with Coinbase over Ethereum-related disclosures.
