The U.S. Securities and Exchange Commission has agreed to pay $150,000 and produce remaining records to settle a two-year Freedom of Information Act lawsuit over its investigations into Ethereum, according to a CoinDesk report. The joint status report, filed July 22 in the U.S. District Court for the District of Columbia, ends a contentious legal battle that exposed the deletion of text messages and data from phones of top SEC officials, including former Chair Gary Gensler.
The suit was brought by History Associates Inc. on behalf of Coinbase in June 2024 after the SEC failed to fully respond to records requests about Ethereum’s shift to proof-of-stake and earlier crypto enforcement actions. While the case has forced the agency to surrender thousands of documents, it also drew attention to broader challenges in regulatory transparency. SEC Commissioner Hester Peirce recently warned that DeFi vaults and onchain lending could be securities, illustrating how the SEC’s internal struggles with records management coincide with aggressive regulatory postures.
Coinbase CEO Brian Armstrong called the settlement agreement a “huge win for crypto” and noted that the FOIA process helped uncover critical information about the SEC’s approach to Ethereum. The deleted messages from Gary Gensler’s phone, which were wiped despite preservation obligations, cast a shadow over his anti-crypto rhetoric. Gensler had previously slammed cryptocurrencies at a NYC event, a sharp contrast to the SEC now paying for its own transparency failures.
A Hard-Fought FOIA Battle
The FOIA suit traced back to 2022, when History Associates first sought records regarding the SEC’s analysis of Ethereum’s transition to proof-of-stake and the agency’s communications with other regulators. After months of delays and incomplete productions, the plaintiffs took the case to federal court. Court filings revealed that multiple agency officials, including Gensler, had failed to preserve text messages, with some phones wiped or replaced during the litigation. The settlement requires the SEC to surrender all remaining non-exempt records and to cover the plaintiff’s legal fees with the $150,000 payment.
What This Means for Regulatory Transparency
The resolution of the case could embolden other crypto industry players to use FOIA to challenge regulatory opacity. It also highlights the need for clearer record-keeping standards at agencies that enforce securities laws in rapidly evolving digital asset markets. With the SEC under new leadership after Gensler’s departure, the settlement may signal a more accountable posture, though fundamental questions about regulation-by-enforcement remain. As the remaining documents are released, market participants will be watching for any further evidence that might influence ongoing debates over Ethereum’s classification and the scope of SEC authority.
