- The SEC lost a year’s worth of text messages from former Chair Gary Gensler due to IT failures.
- The Office of Information Technology and Office of Inspector General found inadequate oversight as a cause.
- The incident raises concerns about recordkeeping during a critical period of crypto regulatory activities.
Nearly a year of text messages from former SEC Chair Gary Gensler were permanently deleted due to IT failures at the SEC.
The loss raises transparency concerns during a key regulatory period for the cryptocurrency market, potentially impacting industry trust and enforcement actions.
The U.S. Securities and Exchange Commission (SEC) disclosed the permanent loss of nearly a year of text messages from former Chair Gary Gensler due to systemic IT failures. This event covers the period from October 2022 to September 2023.
The SEC’s Office of Information Technology (OIT) and Office of Inspector General (OIG) identified inadequate oversight and missed alerts as causes. The agency is instituting new backup policies and disabled government device texting to prevent recurrence.
The incident raises significant concerns about SEC’s recordkeeping, especially during a critical period of crypto regulatory activities. The loss occurs as the crypto industry faces intensified scrutiny and key enforcement decisions.
“The episode was avoidable, citing missed alerts, inappropriate use of emergency change procedures, lack of backups, and insufficient coordination.” — Office of Inspector General, SEC
The financial implications include a $53,000 spend on an external review of the incident, with no direct financial market shifts linked to BTC, ETH, or other cryptocurrencies due to this loss reported.
Historically, there have been similar mishaps in public sector data handling. The current incident stands out due to its timing amid vital regulatory discussions in crypto markets.
Experts emphasize the potential regulatory outcome of enhanced control strategies at the SEC, reflecting on previous failures to maintain its own standards. These reforms could impact future enforcement actions and crypto market regulations.
