More members of the United States Congress are calling on the Securities and Exchange Commission to report on a hack that resulted in a fake announcement on a spot Bitcoin exchange-traded fund (ETF) approval to be posted to X (formerly Twitter).
In a Jan. 11 letter provided to Axios, Senators Ron Wyden and Cynthia Lummis urged SEC Inspector General Deborah Jeffrey to launch a probe into the commission’s cybersecurity practices. The two U.S. lawmakers called it “inexcusable” that the SEC had failed to follow protocols, seemingly allowing a hacker to post a message on X on Jan. 9 suggesting that a spot Bitcoin (BTC) exchange-traded product had been approved for listing on exchanges for the first time.
“A hack resulting in the publication of material information for investors could have significant impacts on the stability of the financial system and trust in public markets, including potential market manipulation,” said Wyden and Lummis. “We request you provide us an update on your investigation and the SEC’s remediation no later than February 12, 2024.”
Fraudulent announcements, like the one that was made on the SEC’s social media, can manipulate markets. We need transparency on what happened.
— Senator Cynthia Lummis (@SenLummis) January 9, 2024
Wyden and Lummis said the SEC’s X account should have enabled multifactor authentication — something X said was not in place at the time of the hack — and “secured its accounts with phishing-resistant hardware tokens.” In signing their letter, the two senators followed similar calls for investigations from Senators J.D. Vance and Thom Tillis and other policymakers after the fake tweet had been published and pulled.
Related: Spot Bitcoin ETF approved in the US: What to expect next
Before the SEC officially approved spot Bitcoin ETF listings on Jan. 10, many experts had speculated that approvals were incoming. Asset managers began filing amendments to 19b-4 forms on Jan. 5, and the Cboe BZX Exchange gave notice of approved securities listings from several firms.
The false start to the spot Bitcoin ETF caused by the SEC tweet — online for roughly 20 minutes — shook the crypto market and had many people doubting the actual approval once it became official. On Jan. 10, following the approval, the SEC said it planned to investigate the tweet with the Federal Bureau of Investigation and the commission’s Office of the Inspector General. It’s unclear who was responsible for the post at the time of publication.
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