Coinbase Files FOIA Request to Uncover SEC’s Spending on Crypto Enforcement Action

Crypto exchange Coinbase is demanding transparency from the U.S. Securities and Exchange Commission (SEC) regarding the costs associated with its enforcement actions against the cryptocurrency industry. In a statement released on March 3, Coinbase’s Chief Legal Officer Paul Grewal revealed that the company has filed a Freedom of Information Act (FOIA) request with the SEC to investigate how much taxpayer money was spent on regulatory actions targeting crypto firms.

The request specifically seeks detailed information about the SEC’s enforcement activities between April 17, 2021, and January 20, 2025, including the number of investigations and enforcement actions launched against crypto firms during this period. Coinbase is also requesting information on the number of employees working on these cases, the involvement of third-party contractors, and the total costs associated with these efforts.

Coinbase Seeks Accountability on Taxpayer Spending

In his statement, Grewal questioned the financial impact of the SEC’s approach, asserting, "We know the previous SEC’s regulation-by-enforcement approach cost Americans innovation, global leadership, and jobs, but how much did it cost in taxpayer dollars?" He added that Coinbase is particularly interested in understanding the operations of the SEC’s Crypto Assets and Cyber Unit, which was responsible for bringing enforcement actions against fraudulent and unregistered crypto asset offerings.

Grewal’s concerns also extend to the budget allocated to the Crypto Assets and Cyber Unit, how many employees worked in it, and the cost of their labor. The unit, established in 2017, was a key part of the SEC's crackdown on the cryptocurrency industry. However, it was replaced by the new Cyber and Emerging Technologies Unit (CETU) on February 20, 2025, as part of a restructuring under the SEC’s new leadership.

A Bold Stance Against SEC's Regulatory Overreach

Coinbase’s legal team has made it clear that they will persist in their efforts to obtain this information, regardless of the time it takes. Grewal emphasized that Coinbase would “do what it takes for as long as it takes” to ensure that the public gains access to details about the SEC’s enforcement costs.

The move comes amid a broader debate over the SEC's aggressive regulatory posture under former SEC Chair Gary Gensler, who led the agency from 2021 until his resignation on January 20, 2025. During his tenure, Gensler adopted a hardline stance on crypto regulation, leading the SEC to file over 100 enforcement actions against crypto firms. Gensler’s departure coincided with the start of Donald Trump’s second term as U.S. president, a term in which Trump had promised to remove Gensler from office. Following Gensler’s resignation, the SEC has begun to retreat from many of its legal actions against crypto firms.

Legal Developments: Dismissals and Settlements

One of the most notable developments in recent months was the dismissal of a lawsuit against Coinbase. In June 2023, the SEC had sued Coinbase, alleging that the exchange had failed to register as a broker, national securities exchange, or clearing agency. However, on February 27, 2025, the SEC agreed to voluntarily dismiss all litigation related to Coinbase and its parent company, Coinbase Global, with prejudice—effectively ending the case permanently.

Coinbase’s legal victory is part of a broader trend of the SEC stepping back from litigation against major crypto firms. On March 3, the SEC also dropped its lawsuit against crypto exchange Kraken, following similar dismissals of actions against other industry players. Among the dismissed cases were those involving non-fungible token (NFT) conglomerate Yuga Labs, which was let go on the same day as Kraken, and the crypto exchange Gemini, which saw its case dropped on February 26. The SEC also recently ended its investigation into Uniswap Labs, the developer behind the popular decentralized exchange, as well as Robinhood Crypto, which had been under investigation after receiving a Wells notice in May 2024.

Conclusion: A Call for Transparency

Coinbase’s FOIA request underscores the growing scrutiny of the SEC’s approach to regulating the crypto industry. As the crypto exchange seeks greater transparency regarding the costs of enforcement actions, it highlights the broader debate over the effectiveness and financial impact of the SEC’s regulatory actions on the industry. With the SEC backing down from a number of high-profile lawsuits, the future of crypto regulation in the U.S. remains uncertain, but Coinbase’s move signals that the industry will continue to press for accountability and transparency from the regulator.