Crypto exchange seeks details on enforcement spending and investigations

Coinbase has filed a Freedom of Information Act (FOIA) request with the United States Securities and Exchange Commission (SEC) to uncover the financial costs associated with the regulator’s enforcement actions against the cryptocurrency industry.

Paul Grewal, Coinbase’s chief legal officer, announced the move on 3 March, stating that the exchange aims to determine how much taxpayer money was spent on regulatory actions targeting crypto firms.

Scrutinising SEC’s Enforcement Costs

The FOIA request covers enforcement activities from 17 April 2021 to 20 January 2025, a period marked by heightened scrutiny of the crypto sector under former SEC Chair Gary Gensler. Coinbase is seeking information on:

• The number of investigations and enforcement actions taken against crypto firms
• The number of SEC employees involved in these actions
• The role of third-party contractors
• The total costs incurred

“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 asked.

Coinbase is also interested in the now-defunct Crypto Assets and Cyber Unit within the SEC’s Enforcement Division. The unit, which was formed in 2017 to tackle fraudulent and unregistered crypto activities, was replaced by the Cyber and Emerging Technologies Unit (CETU) on 20 February. The firm is looking into the budget, employee count, and expenditure of this division.

SEC’s Crypto Stance Under Gensler

Gary Gensler, who chaired the SEC from 2021, took a stringent regulatory approach toward crypto firms, leading to over 100 enforcement actions. His tenure ended on 20 January 2025, coinciding with the start of Donald Trump’s second term as US president. Trump had previously vowed to remove Gensler if re-elected.

Following Gensler’s resignation, the SEC has withdrawn multiple lawsuits against crypto firms. The shift in regulatory direction has seen the SEC drop cases against major players in the sector, including Coinbase, Kraken, Gemini, and Yuga Labs.

Coinbase’s Legal Battle Ends

In June 2023, the SEC sued Coinbase, alleging that the exchange operated as an unregistered broker, national securities exchange, and clearing agency. However, on 27 February, the SEC voluntarily dismissed its case against Coinbase and Coinbase Global with prejudice, ensuring the matter cannot be reopened.

This decision was followed by the regulator dropping its lawsuit against crypto exchange Kraken on 3 March. Other major dismissals include:

• Gemini (case dropped on 26 February)
• NFT conglomerate Yuga Labs (3 March)
• Uniswap Labs (investigation closed recently)
• Robinhood Crypto (Wells notice issued but no further action)

A Long Road Ahead

Grewal emphasised that Coinbase is determined to obtain the requested information, even if it takes time. “We will do what it takes for as long as it takes,” he stated.

The SEC has not commented on the FOIA request. However, with its recent change in leadership and a softer stance on crypto, the regulator’s past enforcement actions remain under scrutiny.