In the vast and intricate machinery of the United States Securities and Exchange Commission (SEC), where the wheels of justice and regulation turn with the precision of a Swiss watch, there has occurred a most peculiar and, dare one say, comical misstep. A recent report has laid bare a series of “avoidable” blunders from the SEC’s IT department, leading to the disappearance of records tied to critical crypto enforcement actions during the tenure of the formidable Gary Gensler. 🤦♂️
IT ‘Oopsie’ Wipes Gensler’s Texts
The SEC’s Office of Inspector General (OIG), in a document as thick as a Tolstoy novel, has detailed the findings of its review into the Office of Information Technology’s (IOT) actions that culminated in the loss of former SEC Chairman Gary Gensler’s text messages spanning 2022 to 2023. It seems, dear reader, that the IT department, in its infinite wisdom, decided to implement a “poorly understood and automated policy” in August 2023, which resulted in the complete erasure of Gensler’s government-issued mobile device. 📱💥
It appears that Gensler’s device, like a forgotten relic in an attic, was erroneously marked as inactive and had not been backed up for nearly a year. In a move that can only be described as hasty and ill-considered, the IT team performed a factory reset, thereby deleting not only the text messages stored on the device but also the device’s operating system logs between October 18, 2022, and September 6, 2023. The situation was further exacerbated by a series of “additional OIT actions, deficiencies, and missed opportunities,” including a glaring lack of backup procedures and a failure to adhere to record retention requirements for high-ranking officials such as Gensler. 🤦♀️
Despite the SEC’s valiant efforts to recover or recreate the lost text messages, they were, alas, unable to restore the entirety of the missing communications. The review revealed that approximately 38% of the recovered text conversations were mission-related, touching upon matters of direct concern to SEC senior staff and Commissioners. Among these, a May 2023 conversation involving Gensler, his staff, and the Director of the Division of Enforcement discussed the timing of the SEC’s action against certain crypto asset trading platforms and their founders. 🕵️♂️🔍
Crypto Leaders Call Out Prior SEC Leadership
On Thursday, the crypto community, ever vigilant and quick to pounce, voiced their concerns over the “mistake” and its far-reaching implications. Nate Geraci, chairman and president of The ETF Store, mused, “Think about everything that happened in crypto during this time. FTX collapse, Grayscale spot BTC ETF lawsuit-makes you wonder what else was erased.” 🤔
Many observers noted that the period of the deleted texts coincided with the SEC’s “Operation Chokepoint 2.0,” a series of enforcement actions against multiple crypto exchanges, the issuance of the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), and various anti-crypto policies from other regulatory bodies. 🛡️🚫
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2025-09-06 08:20