US House Republicans have told Securities and Exchange Commission Chair Paul Atkins that they are investigating the loss of text messages from former SEC Chair Gary Gensler from when he led the agency.
The SEC’s Office of Inspector General’s findings in early September cast doubt on whether the Gensler-led SEC acted with transparency and integrity while serving between 2021 and 2025, House Financial Services Committee Chairman French Hill said in a letter to Atkins on Tuesday.
Hill said the House Financial Services Committee said “is engaging with the OIG to learn more about their report, seek clarity on outstanding questions, and discuss additional areas that require further oversight and investigation.”
Many in the crypto industry accuse Gensler of being key to a theorized Biden administration plan to pressure banks into refusing or limiting services to crypto businesses and argue his SEC stifled the industry with multiple lawsuits against crypto companies during his tenure.
Republicans accuse Gensler of double standards
The letter, also signed by House Ranking Members Ann Wagner, Dan Meuser, and Bryan Steil, said that Gensler sued several financial firms for “widespread record-keeping failures,” collecting more than $400 million worth of fines to settle charges alone in 2023.
The deleted text messages highlight a clear double standard, the House Republicans claimed.
“It appears that former Chair Gensler held companies to a standard that his own agency did not meet.”
SEC IT department blamed for deleted texts
The OIG said the SEC IT department implemented a poorly understood automated policy that triggered a full wipe of Genler’s government-issued mobile phone, which also deleted text messages between October 2022 and September 2023.
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The loss was worsened by poor change management, lack of proper backup devices, ignored system alerts, and unaddressed vendor software flaws, the OIG found.
Conversations with crypto enforcement actions were lost
The OIG found that some of Gensler’s deleted texts involved SEC enforcement actions against crypto companies and their founders, meaning that key communications about how and when the SEC pursued cases may never be fully known.
The SEC also experienced a security blunder in January 2024, when a hacker compromised its X account to post false news that it approved the spot Bitcoin (BTC) exchange-traded funds.
X attributed the security breach to the SEC not having two-factor authentication enabled.
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