The Securities and Exchange Commission has agreed to revamp its internal recordkeeping practices as part of a settlement resolving a lawsuit filed by Coinbase. The dispute centered on the disappearance of text messages belonging to former Chair Gary Gensler, which the exchange argued undermined transparency in the agency's enforcement approach toward the crypto sector.

According to statements from Coinbase's chief legal officer, the resolution marks the conclusion of one of the last major regulatory conflicts initiated during Gensler's leadership. The settlement does not include monetary penalties but requires the SEC to implement new protocols for preserving electronic communications, including texts and instant messages, in line with federal records laws.

The lawsuit was filed after Coinbase learned that Gensler's texts from a critical period had not been retained, raising questions about whether the agency had properly documented internal deliberations on digital asset policy. The exchange contended that the gap hindered its ability to mount a fair defense in ongoing enforcement proceedings.

While the SEC did not admit wrongdoing, the agreement signals a willingness to address longstanding criticism over its handling of internal communications. Observers note that the reforms could set a precedent for how regulators manage digital correspondence in fast-moving enforcement environments.

Coinbase described the outcome as a step toward greater accountability, though it emphasized that broader regulatory clarity for the crypto industry remains unresolved. The exchange continues to press for rulemaking that defines which digital assets fall under securities law, a demand that has persisted across multiple administrations.