Coinbase files FOIA to see how much the SEC’s ‘war on crypto’ cost
Crypto exchange Coinbase is seeking to discover how much the US Securities and Exchange Commission (SEC) spent on enforcement action against crypto firms.
Coinbase chief legal officer Paul Grewal said in a March 3 statement to X that the request under the Freedom of Information Act (FOIA) was submitted to the SEC to find out how many investigations and enforcement actions were brought against crypto firms between April 17, 2021, through Jan. 20, 2025.
The crypto exchange also seeks information on how many employees worked on the enforcement actions, how many third-party contractors were used, and how much it all cost.
Source: Paul Grewal
“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? “ Grewal said.
“We also want to know more about the previous SEC’s infamous Crypto Assets and Cyber Unit within the Enforcement Division – what was their budget, how many employees worked on it, how much did those employee hours cost?”
The SEC’s Crypto Assets and Cyber Unit, formed in 2017, brought enforcement actions against fraudulent and unregistered crypto asset offerings and platforms. The unit was replaced by the Cyber and Emerging Technologies Unit (CETU) on Feb. 20.
Grewal says while it may take time to “get the full picture,” the crypto exchange will happily “do what it takes for as long as it takes” to get the requested information.
Coinbase wants to know how many employees worked on the SEC’s enforcement actions against crypto exchanges and how much it cost taxpayers. Source: Office of FOIA Services
An SEC spokesperson declined to comment.
Former SEC Chair Gary Gensler, known for his hardline stance on crypto regulation, resigned on Jan. 20, 2025.
While at the helm of the regulator, which began in 2021, the SEC took an aggressive regulatory stance toward crypto, bringing upward of 100 regulatory actions against firms.
Related: SEC drops investigation into NFT marketplace OpenSea
Gensler departed the same day that crypto-friendly Donald Trump started his second presidential term as US president. Trump had promised to fire Gensler once elected.
Following Gensler’s exit, the SEC has opted out of a swathe of lawsuits against crypto firms.
Coinbase was sued by the SEC in June 2023, alleging the exchange never registered as a broker, national securities exchange, or clearing agency.
The action was dropped on Feb. 27, when the SEC agreed to voluntarily dismiss all litigation tied to Coinbase and Coinbase Global with prejudice, ending the case permanently.
The SEC dropped its lawsuit against crypto exchange Kraken on March 3, which followed a raft of other dismissals, which reportedly included non-fungible token (NFT) conglomerate Yuga Labs on the same day and crypto exchange Gemini on Feb. 26.
It also recently ended its investigation of Uniswap Labs, the developer behind the Uniswap decentralized exchange and online brokerage Robinhood Crypto, which received a Wells notice on May 4.
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Coinbase has recently taken a significant step in its ongoing clash with the U.S. Securities and Exchange Commission (SEC) by filing a Freedom of Information Act (FOIA) request. This demand seeks transparency regarding the costs accrued by the SEC as it pursues regulatory actions against cryptocurrency entities, including the well-known exchange itself.
The FOIA request comes amid Coinbase’s ongoing battles with the SEC, which ramped up scrutiny of the crypto industry earlier this year. The SEC’s actions have raised questions not only about the legality of various cryptocurrency offerings but have also fueled debates surrounding the agency’s overall approach to regulation in the rapidly evolving digital asset space.
In its FOIA request, Coinbase aims to understand how much the SEC has spent in legal fees and other expenses associated with its enforcement actions in the crypto sector. There is widespread speculation that the costs could be substantial, particularly given the ongoing legal disputes and investigations into the practices of several major crypto firms.
Rachel Rojas, Coinbase’s Chief Legal Officer, noted that the response from the SEC could shed light on its expenditures, especially concerning its recent regulatory interventions. Rojas emphasized that the core of the request is to reveal if taxpayer money is being utilized effectively and whether such significant costs yield any meaningful results for consumer protection and market integrity.
Industry observers have pointed out that while the SEC’s aggressive enforcement might be aimed at fostering a more secure trading environment, it has also resulted in considerable uncertainty within the crypto landscape. Many businesses claim that the regulatory atmosphere is stifling innovation, with companies hesitant to launch new products or expand their operations due to fear of repercussions from the SEC.
Moreover, other crypto firms have echoed Coinbase’s sentiments regarding the need for clarity in regulations. The call for common-sense guidelines has become louder as companies continue to navigate a labyrinth of existing laws that often fail to accommodate the unique characteristics of digital assets.
The tension between the SEC and cryptocurrency firms comes against a backdrop of a broader dialogue about the future of digital currencies and their place in the financial ecosystem. Advocates for the sector argue that a more balanced regulatory approach could foster growth and innovation, which could be beneficial not only for businesses but also for consumers looking to engage with digital assets.
Ultimately, Coinbase’s FOIA request reflects a growing appetite among crypto industry stakeholders for clearer insight into regulators’ actions and their implications. As the landscape evolves, the quest for regulatory clarity remains paramount for companies wishing to thrive in the cryptocurrency sector.
