- The SEC inspector general says IT actions erased Gary Gensler’s texts from October 18, 2022 to September 6, 2023.
- The loss spans FTX’s November 11, 2022 bankruptcy period and the SEC has since limited agencywide texting.
The U.S. Securities and Exchange Commission’s watchdog found that avoidable information technology errors led to the deletion of former Chair Gary Gensler’s text messages for nearly eleven months. The period includes the November 2022 collapse and bankruptcy filing of cryptocurrency exchange FTX.
OIG details device wipe, factory reset, and missing backups that erased records
The Office of Inspector General reported that the SEC’s Office of Information Technology implemented an automated policy in August 2023 to enterprise wipe devices that appeared inactive for at least 45 days.
Gensler’s phone had stopped communicating with the agency’s mobile device management system on July 6, 2023, although it remained in regular use. On September 6, 2023, after that enterprise wipe had removed SEC-managed apps, staff performed a factory reset while attempting remediation. The reset deleted text messages and operating system logs.
The review concluded the SEC had not backed up the device for nearly a year and lacked necessary logs to diagnose why the handset fell out of contact with the management system.
The inspector general cited deficiencies in change management, inventory monitoring, vendor product issue handling, and timely retention of Capstone officials’ mobile records. An after-action report commissioned from a contractor cost an estimated $53,000 but suffered from gaps that limited its usefulness.
SEC curtails texting, notifies archives, and warns of FOIA impacts as timeframe overlaps FTX case
The deleted messages span October 18, 2022 through September 6, 2023. That window covers the period in which FTX filed for Chapter 11 protection on November 11, 2022, with related debtor filings in the following days. Market participants are likely to scrutinize the overlap given the scale of the failure and subsequent enforcement and policy debates.
Since the incident, the SEC has disabled text messaging across the agency with specific exceptions, and it notified the National Archives and Records Administration in June 2025 about the lost records.
The inspector general noted that the absence of these messages could limit the agency’s ability to respond to certain Freedom of Information Act requests. The report includes five recommendations to strengthen device management and federal records compliance, which management accepted with planned corrective actions.
The report places the loss in the context of the SEC’s “Capstone” approach for retaining communications from senior officials. The agency expanded Capstone to include text messages for those officials in October 2022 and began coordinating backups of new devices in March 2024. The inspector general also noted the SEC replaced its mobile device management platform in the summer of 2024.
For digital asset markets, the episode underscores recordkeeping risk during periods of intense operational stress and regulatory activity. The watchdog’s account documents how automated policies, incomplete backups, and rapid remediation efforts can interact to produce irreversible data loss, with downstream implications for transparency and litigation discovery.
At the time of press, Bitcoin (BTC) was trading at $112,623.00, reflecting exactly a +$1,901.00 increase from the previous close, which is a +1.71 % gain.
