United States Senators J.D. Vance and Thom Tillis have called on the United States Securities and Exchange Commission to provide a report about the Jan 9th breach of its X account.
Markets were sent into a tizzy after the official SEC account on X tweeted that the regulator had approved the trading and listing of a spot Bitcoin ETF.
Senators Seek Report
In a letter sent to the Securities and Exchange Commission, senators J.D. Vance and Thom Tillis called the breach a serious concern. Also, they expressed concerns about the commission’s internal cybersecurity procedures. The letter called the incident “antithetical to the Commission’s tripartite mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”
“BREAKING: Senators @JDVance1 & @SenThomTillis demand explanation For The SEC’s Errant Announcement Of The Approval Of Spot-Bitcoin ETFs. It is unacceptable that the agency entrusted with regulating the epicenter of the world’s capital markets would make such a colossal error.”
According to the senators, the incident introduced considerable confusion in the markets. They also asked the Securities and Exchange Commission to submit a report about the incident, setting a deadline for the 23rd of January for the submission of the report. Additionally, the letter reminded the SEC that it requires all businesses to disclose all impacts to the business within four days of a cybersecurity breach.
“If this ‘compromised’ social media post was indeed a result of a cybersecurity attack, would it be possible for the Commission (SEC) to provide Congress with a report on the breach within four business days? If not, please explain why.”
The Account Breach
The incident being referred to in the report occurred on the 9th of January when the SEC’s X account shared a tweet that suggested the SEC had approved spot Bitcoin ETFs in the United States, sending markets into a tizzy. However, this excitement was cut short after SEC Chair Gary Gensler revealed that the SEC’s X account had been compromised and used to send out a false tweet.
“The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff.”
With the markets and investors confused, many pointed to the SEC’s lack of preparedness when it came to online threats and cyber-attacks. A separate internal investigation revealed the SEC’s X account was not using two-factor authentication at the time of the breach. The report also revealed that the compromise was not due to a breach of X’s system but a bad actor gaining control of a phone number associated with the account.
“Based on our investigation, the compromise was not due to any breach of X’s systems, but rather due to an unidentified individual obtaining control over a phone number associated with the @SECGov account through a third party.”
Politicians And Lawyers Demand Full Investigation
Meanwhile, politicians and lawyers have demanded a full investigation into the Securities and Exchange Commission following the incident. US Senator Bill Hagerty stated in a post on X,
“Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable.”
Meanwhile, Senator Cynthia Lummis also demanded that the SEC offer some transparency regarding the incident. Charles Gasparino from Fox Business claimed securities lawyers had told him that the SEC would have to investigate itself for market manipulation. US Representative Ann Wagner called the incident a clear case of market manipulation that impacted millions of investors.
“Deeply concerned with this alleged hack of the SEC’s Twitter account. This is a clear market manipulation that impacted millions of investors. I plan to get more answers from Chair Gensler on this incident.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
