May 28, 2024

US Senators urge SEC for clarity following misleading tweet on Bitcoin ETFs

U.S. Senators J.D. Vance and Thom Tillis have urged the Securities and Exchange Commission (SEC) to provide a detailed report to Congress regarding the Jan. 9 breach of X account.

In their Jan. 9 letter to SEC Chair Gary Gensler, Vance and Tillis expressed deep concerns about the SEC’s cybersecurity measures, citing the incident as contradictory to the SEC’s mission of protecting investors, ensuring efficient markets, and aiding capital formation.

The letter was in reference to the widely cited breach that led to the dissemination of false information about the approval of Bitcoin exchange-traded funds (ETFs) in the United States.

The senators highlighted the confusion caused by the breach and emphasized the importance of the SEC adhering to the recently established rule about disclosing cybersecurity incidents within four days. They requested a report on the breach by Jan. 23, seeking clarity on whether the SEC can comply with its own disclosure mandate.

On Jan. 9, the SEC’s X account posted a false tweet claiming the approval of spot Bitcoin ETFs in the US, causing a brief stir in the crypto community. However, this was short-lived as SEC Chair Gary Gensler later confirmed the account had been compromised and the tweet was unauthorized.

The incident led to volatile market reactions, with Bitcoin’s price briefly surging to approximately $47,900 before falling to around $46,100.

An internal investigation from X revealed the account was not protected by two-factor authentication. The breach was attributed to an unauthorized individual gaining control of a phone number linked to the SEC’s account without any compromise of the social media platform’s systems.

Senators Cynthia Lummis, Bill Hagerty, and Representative Ann Wagner have also expressed concerns. Hagerty demanded full transparency regarding the incident, while Lummis emphasized the need for clear communication to prevent market manipulation.

It is widely expected that spot bitcoin ETFs will likely be approved by the US financial regulator in the imminent future, with trading widely believed to commence by Jan. 11.

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