For years, if you asked anyone in crypto to name their biggest villain, 90% would’ve said the same name: Gary Gensler.

Someone who’s new to crypto reading this:

Before we had today’s SEC (open to innovation, trying to work with crypto companies, yada yada), we had Gary Gensler running the show.

And boy, did he run it differently.

During Gensler’s 4-year tenure, the SEC launched a staggering 125 crypto-related enforcement actions.

Now, this could’ve been good if the SEC was going after actual fraud, like rug pulls and Ponzi schemes.

But no – most of these lawsuits were against legit businesses (exchanges, token creators, and lending platforms), accused of selling unregistered securities under the Howey test.

FYI: that test was created in the 1940s to deal with orange groves

It’s like using your grandpa’s flip phone manual to fix your iPhone.

So, basically, instead of creating clear rules for crypto companies to follow, Gensler’s SEC used “regulation by enforcement” – they’d sue companies and then use those court cases to set the rules.

This means businesses had no way to know if their token was a security until they got sued.

And the targets weren’t some funky startups, either – we’re talkin’ big dawgs like Binance, Coinbase, and Ripple.

The result? A climate of fear, projects moving overseas, slower trading activity, and institutional investors staying away.

“Uhh… ok? Things changed? Why are we talking about this? ” – you, maybe.

Well, there are updates to this drama – and they’re spicy

In January 2024, the SEC’s tech team discovered something… interesting: nearly a year’s worth of Gary Gensler’s text messages had been deleted.

We’re talkin’ messages from October 2022 to September 2023 – right when his enforcement campaign was at its most intense.

And we can’t help but speculate whether those missing texts could’ve answered some big questions, like:

Was the SEC’s enforcement fair? Were decisions being made based on politics rather than law? What was really happening behind closed doors?

… I guess we’ll never know.

Now, the spicy part: the reason for this massive data loss is… just wtf.

Apparently, in July 2023, the SEC’s tech office somehow flagged Gensler’s phone as “inactive.” The phone stopped talking to their device management system, but nobody noticed.

Then, in August 2023, they implemented a new policy: any device flagged as inactive gets wiped after 45 days.

In September 2023, this policy kicked in and automatically erased Gensler’s phone.

The cherry on top? The device hadn’t been backed up since October 18, 2022.

This means nearly a year of communications → gone.

Now, the aftermath:

The SEC’s inspector general, Kevin Muhlendorf, released a report on the situaysh and said the mess was “avoidable.”

He pointed to missed alerts, sloppy emergency procedures, lack of proper backups, and poor coordination with vendors.

Basically, a whole lotta incompetence.

The SEC has since made some changes: they’ve disabled texting on most government phones, told the National Archives about the lost records, and agreed to five reforms recommended by the inspector general.

These include better oversight of device wipes, improved record-keeping, verified backups for senior officials, and requiring management approval before any factory resets.

So there you have it. The texts are gone, the questions remain, and the crypto industry moves forward with a new sheriff in town – hopefully one with better IT support.

A Securities and Exchange Commission investigation into missing text messages from former chair Gary Gensler’s phone between October 2022 and September 2023 has concluded that “avoidable errors” led to their loss. 

The SEC Office of Inspector General (OIG) investigated how nearly a year’s worth of text messages from Gary Gensler were permanently lost between October 2022 and September 2023, during the height of the agency’s crypto enforcement action campaign.

In a report released on Wednesday, the OIG revealed that the SEC’s IT department “implemented a poorly understood and automated policy that caused an enterprise wipe of Gensler’s government-issued mobile device,” which deleted stored text messages and operating system logs.  

The loss was worsened by poor change management, lack of proper backups, ignored system alerts and unaddressed vendor software flaws.

The IT department failed to collect or maintain necessary log data, which is why the commission could not determine why Gensler’s smartphone stopped communicating with the SEC’s mobile device management system.

Key communications about 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, even to courts, Congress or the public.

Related: Judge has ‘strong views’ about Coinbase inquiry into Gensler’s private msgs

Investigators reviewed about 1,500 messages recovered from colleagues and other records. They determined that the majority were federal records, with around 38% of the recovered text conversations “mission related” concerning matters directly involving SEC senior staff at the time, such as: 

“A May 2023 conversation involving Gensler, his staff, and the Director of the Division of Enforcement about when the SEC would be filing an action against certain crypto asset trading platforms and their founder.”

LATEST: The SEC’s Inspector General released a report on the loss of text messages from former Chair Gary Gensler due to avoidable errors by the agency’s IT office between October 2022 and September 2023. pic.twitter.com/3iWixftGKR

— Cointelegraph (@Cointelegraph) September 5, 2025

SEC crackdown on recordkeeping 

Around the same time that Gensler’s messages were disappearing into a black hole, the SEC cracked down on the use of messaging apps. Several global investment banking and financial institutions were charged with violating record-keeping and books-and-records laws under the 1934 Securities and Exchange Act. 

“Finance, ultimately, depends on trust. By failing to honor their recordkeeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust,” said Gensler at the time. 

Undermining transparency in crypto decisions

The SEC has since disabled text messaging on most devices, notified the National Archives and Records Administration of lost records, introduced Capstone-specific records training for senior officials, and started improving backup practices for senior officials’ devices.

“The loss of Gensler’s text messages may impact the SEC’s response to certain Freedom of Information Act requests,” it stated. 

Gensler, who stepped down in January, was infamous in the crypto community for his bait-and-switch offer to “come in and get registered,” which pre-empted multiple SEC actions against companies that claimed they tried to do exactly that. Enforcement actions against crypto companies reached a 10-year high in 2023.  

“Think about everything that happened in crypto during this time. Basically, FTX collapse through the Grayscale spot BTC ETF lawsuit,” observed NovaDius Wealth Management President Nate Geraci, who added“makes you think.”

“So Gary Gensler’s text messages from his tenure as SEC chairman are forever lost in a mysterious ‘boating accident’ ???,” quipped Custodia Bank founder Caitlin Long. 

Magazine: Korean bill to legalize ICOs, Chinese firm’s Ethereum RWAs mystery: Asia Express

Crypto liquidations reached $806.44 million in the past 24 hours, wiping out leveraged positions at a scale not seen in weeks.

The liquidation cascade followed a steep drawdown in prices: Bitcoin fell from an opening level of $114,163 to a close near $111,931, with intraday extremes stretching from $114,373 down to $110,802.

Ethereum mirrored this move, sliding from $4,784 to $4,635, with a trading range between $4,798 and $4,621. Both lost more than 2.5% on the day.

Long positions were hit the hardest. Of the $807.44 million total liquidations, $642.45 million came from longs, compared to $162.4 million from shorts. Bitcoin accounted for $267.85 million of the total, while Ethereum was close behind at $263.41 million.

The near parity between BTC and ETH liquidations shows that speculative interest is still concentrated in these two assets, which made up more than two-thirds of all liquidations in the past 24 hours.

Bybit was the epicenter of forced closures, responsible for $304 million in liquidations, 87% of which were long positions. Binance followed with $209 million in liquidations, again skewed toward longs at over 75%. OKX saw $117 million flushed out, while smaller platforms like Gate and HTX contributed tens of millions more.

Interestingly, Bitfinex and Bitmex were the outliers where short positions dominated liquidations. This tells us that exchange-specific positioning can deviate sharply from the general market.

The scale of long liquidations points to the overextension of bullish leverage at elevated price levels. Traders had been building directional bets on continued strength, especially given Ethereum’s new peak over the weekend. But, when Bitcoin failed to sustain above $114,000 and Ethereum slipped below $4,700, cascading margin calls triggered forced sell orders.

This intensified the downside move and reinforced the feedback loop of liquidation-driven selling pressure. The largest single order during this period occurred on OKX, with a BTC-USDT swap liquidation valued at $12.49 million.

The weight of BTC and ETH is clearly seen in the liquidation heatmap. Together, they accounted for over $530 million in forced closures.

Other large-cap tokens like Solana and Dogecoin were hit as well, though at much smaller magnitudes, reflecting their lower share of speculative leverage.

Altcoins with thinner liquidity pools saw pockets of sharp forced selling, but the dominant theme of the day was the structural unwinding of BTC and ETH leverage.

Best-selling author Robert Kiyosaki says that the US is about to experience out-of-control inflation that will have devastating impacts on personal wealth.

In a post on the social media platform X, the Rich Dad Poor Dad author tells his 2.7 million followers that a sudden lack of demand for US bonds is resulting in money printing, which debases the dollar.

“The end is here: what if you threw a party and no one showed up? That is what happened [May 20th]. The Fed held an auction for US Bonds and no one showed up. So the Fed quietly bought $50 billion of its own fake money with fake money. The party is over. Hyperinflation is here. Millions, young and old to be wiped out financially.”

Kiyosaki also says that silver, gold and Bitcoin (BTC) are a hedge against rising inflation, and he predicts massive price targets for the assets as a result.

“Good news. Gold will go to $25,000. Silver to $70. Bitcoin to $500,000 to $1 million… The end I have been warning the world about is here. May God have mercy on our souls.”

Lastly, he says that the dwindling supply of available BTC for sale will drive the flagship crypto asset’s price higher.

“I cannot believe how easy Bitcoin has made getting rich, so easy. Why everyone is not buying and holding Bitcoin is beyond me. Even .01 of a Bitcoin is going to be priceless in two years – and maybe make you very rich. Sure, Bitcoin goes up and down, but so does real life. There are only one or two million Bitcoin left to be mined, and the price will go as [macro guru and Real Vision CEO] Raoul Pal describes as into the ‘Banana Zone.’”

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As Bitcoin (BTC) experienced a modest dip over the weekend – falling from nearly $112,000 to $106,600 – late longs bore the brunt, with over-leveraged traders facing significant liquidations. In contrast, long-term investors took advantage of the pullback to increase their BTC exposure.

Bitcoin Late Longs Get Wiped Out

According to a recent CryptoQuant Quicktake post by contributor Amr Taha, Bitcoin’s price drop below the key $111,000 level triggered a cascade of liquidations that primarily affected late long positions. In total, the downward move led to approximately $185 million in long position liquidations.

For the uninitiated, Bitcoin late longs refer to leveraged long positions entered into after a price rally, often by traders expecting further short-term gains. These positions are vulnerable to sudden price drops, leading to rapid liquidations when support levels fail.

The first major liquidation cluster occurred around $110,900. Once BTC fell below this level, over $97 million in long positions were wiped out. A second wave of liquidations followed when the price dipped below $109,000, wiping out an additional $88 million in leveraged longs within hours.

While short-term holders (STH) faced heavy losses, long-term holders (LTH) responded differently. Rather than being shaken out, they seized the opportunity to accumulate more Bitcoin.

Taha highlighted that, based on the STH/LTH Net Position Realized Cap chart, the LTH realized capitalization has now exceeded $28 billion for the first time since April 2025. The analyst added:

With the LTH realized cap now surpassing $28 billion, it’s clear that long-term investors are using this period of forced selling to increase their exposure and accumulate more Bitcoin for the long run. This strategic accumulation during moments of market stress reflects the deep conviction of LTHs.

In a separate post on X, noted crypto analyst Titan of Crypto noted that Bitcoin recently achieved its highest weekly close ever. This milestone underscores the strong bullish sentiment shared among long-term investors, who continue to anticipate higher prices.

What Is Working For BTC?

Several market observers have pointed out that the current rally appears more sustainable than previous ones, with fewer signs of euphoria. Analysts argue that Bitcoin’s ongoing upward momentum has not exhibited overheating, suggesting a healthier market structure.

Moreover, technical indicators suggest ambitious price targets for Bitcoin. For example, analyst Gert Van Lagen has projected that BTC could soar as high as $300,000 during this bull cycle.

Institutional interest also remains strong. Strategy CEO Michael Saylor recently hinted at another large Bitcoin purchase, further reinforcing confidence in BTC’s long-term potential. At press time, BTC trades at $109,535, up 1.9% in the past 24 hours.

Featured Image from Unsplash.com, charts from CryptoQuant, X, and TradingView.com

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