The SEC’s Office of the Inspector General (OIG) found that nearly a year of text messages from former chair Gary Gensler have been permanently deleted — a gap that could complicate Freedom of Information Act requests and congressional oversight.
Per the review, Gensler’s SEC-issued smartphone stopped syncing with the agency’s device-management system on July 6, 2023 and appeared inactive for 62 days. On August 10 the Office of Information Technology rolled out a new 45-day wipe policy that treats devices that haven’t connected within that window as lost or stolen. Under that rule the phone was wiped; when Gensler discovered missing agency apps at SEC headquarters on September 6, 2023, staff attempting to restore the device instead performed a factory reset that permanently deleted the texts covering October 18, 2022 through September 6, 2023. The OIG also cited missed warnings, poor vendor coordination and weak change-management practices. The National Archives was notified of the loss in June.
The timing matters to the crypto industry. The missing messages overlap with a concentrated period of SEC enforcement and scrutiny: in January 2023 the agency charged Genesis and Gemini and reached a settlement with Nexo; February brought a $30 million fine for Kraken’s staking program and scrutiny of Paxos’ Binance-branded stablecoin. Internal records show the SEC labeled Ethereum a security in March, and in April Gensler told Congress that many tokens meet the Howey test. Those investigations and policy debates may have been discussed in the deleted messages.
Why this matters: beyond a clear data-management failure, the deletion raises transparency and legal risks for both the regulator and industry participants. Missing records can impede FOIA responses, slow investigations and complicate litigation or oversight inquiries. The OIG recommends strengthening device controls, vendor coordination and change-management procedures to prevent future losses.
Source: Decrypt. Read the original coverage for full details.