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Highlights
- Some of the recovered Gary Genlser texts include key crypto-related discussions.
- The loss has sparked scrutiny, as the period coincided with major crypto events like the FTX collapse and the Grayscale Bitcoin ETF lawsuit.
- The recent IT failure at the top US financial regulator raises concerns about transparency and record-keeping at the SEC.
The U.S. Securities and Exchange Commission (SEC) noted that a year’s worth of text messages from former Chair Gary Gensler’s phone have gone missing, in the period between October 2022 and September 2023. The lost messages also include some key crypto conversations during this period between Gensler and his team. Although the SEC said that some ‘avoidable errors’ led to the losses, experts question how the period coincides with the FTX collapse timing. Previously, a controversy erupted over Gensler’s discussions with FTX team before their bankruptcy.
Former SEC Chair Gary Gensler’s Texts Go Missing
According to a new report from the SEC’s Office of Inspector General (IG), nearly a year’s worth of text messages from former Chair Gary Gensler were permanently lost. The report refers to it as “avoidable” technology failures within the agency’s Office of Information Technology. SEC reports on Gensler comes soon after releasing the Regulatory Flexibility Agenda for Spring 2025.
The missing records cover messages sent and received on Gensler’s government-issued phone between October 18, 2022, and September 6, 2023. Furthermore, the SEC said that the loss of text messages occurred due to weak change management practices, ignored system alerts, inadequate backup procedures, and unresolved vendor software flaws.
The SEC’s IT department also failed to collect or retain essential log data, leaving the agency unable to determine why Gensler’s smartphone stopped connecting to its mobile device management system. After recovering 1500 messages through different records, the investigators determined that nearly 38% of the text conversions were “mission related”. As per the SEC report, it also included key crypto conversations such as:
“A May 2023 conversation involving Gensler, his staff, and the Director of the Division of Enforcement about when the SEC would be filing an action against certain crypto asset trading platforms and their founder.”
Experts Correlate This With FTX Collapse Timing
Crypto Expert Nate Geraci, also the President of NovaDius Wealth Management, raised questions on how a full year’s worth of important text conversations of the former SEC Chair went missing. Geraci stressed that the period covers critical events for the crypto industry, including the collapse of FTX and the Grayscale spot Bitcoin ETF lawsuit.
“I’m serious. Think about everything that happened in crypto during this time. Basically, FTX collapse through the Grayscale spot BTC ETF lawsuit. Makes you think,” noted Geraci.
As per previous rumors, the former SEC Chair likely communicated with Sam Bankman-Fried (SBF) or other FTX representatives, with several former associates of Gensler reportedly helping arrange meetings between him and the FTX founder.
Gary Gensler, known for his crypto crackdown during his tenure, is infamous within the crypto community for his anti-crypto crackdown. Paul Atkins has filled in Gensler’s shoes in the Trump administration, taking a pro-crypto stand. In his latest statement, Atkins stated that most cryptocurrencies are not securities.
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