Nearly a year’s worth of text messages from former SEC Chair Gary Gensler were permanently deleted in what a government watchdog described as a cascade of avoidable errors. The erased messages, spanning from October 2022 through September 2023, covered a period marked by major crypto industry events, including the collapse of FTX and high-profile SEC enforcement actions.

The loss began when Gensler’s government-issued phone stopped syncing with the SEC’s device management system in July 2023. Subsequently, the agency implemented a policy that automatically wiped devices inactive for more than 45 days, mistakenly assuming such devices were lost or unused. When Gensler discovered missing SEC apps in September 2023, IT staff rushed to restore the device but instead performed a factory reset, erasing all data—including the unrecovered text messages.

These messages were not backed up, making recovery impossible. Investigators later found many likely included federal records involving enforcement actions, settlement talks with major financial institutions, and coordination with other government offices. The incident has stoked significant criticism within the crypto industry and beyond, with some leaders calling it the destruction of evidence relevant to ongoing litigation and regulatory disputes.

In response, the SEC has notified the National Archives about the lost records, disabled text messaging on most government phones, and begun implementing reforms. Steps include improved oversight and approval processes for device wipes, stronger backup verification, and changes to log retention for senior officials, with targets extending into 2026. The fallout from these avoidable failures continues to fuel distrust of the SEC’s oversight practices in the eyes of many in the crypto community.