Former SEC Chairman Gensler under fire over lost FTX-era messages
The little-remembered SEC Chairman Gary Gensler has found himself at the center of a new scandal over the loss of text messages during the collapse of FTX.
According to a new report, the SEC lost all messages from Gensler’s official mobile device due to preventable errors. Inspector General Report No. 587, dated September 3, states that IT mistakes and insufficient oversight led to the loss of Gensler’s texts at a critical time during FTX’s downfall.
Gensler’s phone stopped syncing with agency systems on July 6, 2023, due to an error. Afterward, data from his phone was automatically deleted under an August policy requiring data erasure from any device disconnected from the system for more than 45 days.
The report noted that recovery of the messages was still possible at that point. However, when IT staff attempted to restore the phone, they mistakenly performed a factory reset. This erased all of Gensler’s messages from October 18, 2022, to September 6, 2023.
Suspicious timing
The data loss of a top official who played a key role in shaping crypto regulation during a crucial period has predictably sparked criticism. The missing text dates closely align with the FTX collapse: the exchange declared bankruptcy in November 2022, while its founder Sam Bankman-Fried was convicted in November 2023.
“This isn’t just an ‘oops.’ It’s the destruction of evidence tied to upcoming litigation. We all deserve better, especially from so-called leaders who see fit to smear others,” commented Coinbase Chief Legal Officer Paul Grewal regarding the lost data.
As we wrote, Farewell, Gary Gensler: How the SEC Chair impacted crypto industry
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