Coinbase Settles SEC Lawsuit Over Freedom of Information Act and Advances Retention Policy Changes

BlockBeats News, July 22nd, according to The Wall Street Journal report, Coinbase's Chief Legal Officer Paul Grewal stated that Coinbase has reached a settlement with the U.S. Securities and Exchange Commission regarding a Freedom of Information Act lawsuit. The SEC will pay $150,000 and amend its record-keeping policy. The lawsuit revealed that the SEC lost nearly a year's worth of communications records from former chairman Gary Gensler and other top officials during the peak of crypto industry enforcement.

Previously, Coinbase had requested the SEC to provide documents on how it applies securities laws to digital assets, but was refused. Coinbase then filed a lawsuit and received court support. The SEC stated that some text messages were lost due to an automatic data deletion process. Grewal pointed out that the SEC had previously fined financial institutions billions of dollars for similar record-keeping issues.

In February of this year, Coinbase also settled another Freedom of Information Act lawsuit with the Federal Deposit Insurance Corporation. Coinbase stated that the lawsuit disclosed that the FDIC had asked nearly twenty banks to halt crypto-related services starting in 2022. Subsequent documents led to a congressional hearing and a court ruling that the FDIC had violated federal law.

Grewal stated that both lawsuits revolved around government transparency and due process, asserting that the American public has the right to know if regulatory agencies are restricting legitimate crypto businesses from accessing banking services through non-public means.