An investigation by the SEC’s Office of Inspector General (OIG) revealed that “avoidable errors” led to the permanent deletion of nearly a year’s worth of former SEC Chair Gary Gensler’s text messages. These messages spanned between October 2022 to September 2023.
The data loss occurred during a period of heightened SEC enforcement against crypto firms.
The OIG report detailed how the SEC’s IT department applied an automated policy that triggered an enterprise wipe of Gensler’s government-issued phone, erasing text messages and system logs.
The issue was compounded by inadequate backups, poor change management, ignored alerts, and software flaws from a vendor.
Some deleted texts pertained to SEC crypto enforcement actions, potentially obscuring critical details from courts, Congress, and the public.
SEC Chair Atkins Unveils Crypto-Friendly Regulatory Agenda
On Thursday, SEC Chair Paul Atkins announced a spring 2025 regulatory agenda featuring around 20 proposed rules that could reshape the agency’s approach to digital assets.
The proposals signal a shift toward a softer enforcement stance, aiming to provide clarity and reduce regulatory burdens for crypto projects.
Key proposals include “safe harbors” and exemptions for crypto asset offerings and sales.
Additionally, it also includes amendments to the Exchange Act to accommodate crypto trading on alternative trading systems and national securities exchanges.
These changes could allow crypto firms to operate with less oversight and lower legal risks.
Additionally, reforms to broker-dealer financial responsibility rules may ease compliance burdens, particularly around Know Your Customer and Anti-Money Laundering requirements.
These requirements have been known to be contentious for the industry.
Wintermute Calls for Exclusion of Network Tokens from Securities Rules
Crypto trading firm Wintermute submitted a formal response to the SEC, urging the agency to clarify that network tokens, such as Bitcoin and Ether should not be classified as securities.
The firm argued that these tokens are integral to blockchain network operations, not financial products, and should be exempt from securities regulations.
Wintermute emphasized that clear regulatory guidance is essential to avoid misapplying securities laws, which could stifle innovation and adoption in the crypto sector.
The firm’s comments were in response to an SEC request for input, highlighting the need for a framework that supports the growth of decentralized networks.
