US Congressional Committee Demands SEC Briefing on Misleading Bitcoin ETF Information on X

Jimmy Aki

Last updated:

January 11, 2024 15:00 EST | 2 min read

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.Source: AdobeStockA group of Republican lawmakers from the US House Financial Services Committee has urged Securities and Exchange Commission (SEC) Chairman Gary Gensler to address inquiries concerning the hack of the agency’s X account on January 9, 2024.

In a press release on January 10, the committee stated that it had dispatched a letter to the SEC demanding a comprehensive briefing to be provided by January 17, 2024.

The inquiry stemmed from a tweet posted on the SEC X account on January 9, falsely claiming the approval and listing of Bitcoin ETFs on all registered national securities exchanges.

The misleading post gained widespread traction on business news websites, Bloomberg TV, and ious social media platforms until Chairman Gensler clarified that the agency’s account had been compromised.

The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.

— Gary Gensler (@GaryGensler) January 9, 2024

The 15-minute gap between the viral post and Gensler’s clarification saw the price of Bitcoin surge to nearly $48,000, highlighting the potential impact of misinformation on the cryptocurrency market.

Source: CoinMarketCap BTC dataThe committee’s letter stressed the critical connection between the SEC’s ability to fulfill its mission, which includes investor protection, fair and efficient markets, capital formation, and effective communication with market participants.

Led by Chair Patrick McHenry and members Rep. Bill Huizenga, Rep. French Hill, and Rep. Ann Wagner, the committee stated its jurisdiction to oversee SEC activities in accordance with Rule X of the Rules of the House of Representatives.

Gensler Receives Backlashes Over Viral Post

The recent incident marks a significant setback for Gensler, who has prioritized cybersecurity as a key focus area.

The SEC chair has actively enforced more stringent regulations to improve the disclosure of cyber incidents by businesses. He has also taken punitive actions against crypto-centric platforms that mislead investors about their cybersecurity practices.

In minutes following Gensler’s clarification of the hoax information, Bill Hagerty, a member of the Senate Banking Committee, stated that the SEC’s account compromise was “unacceptable” and demanded accountability.

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.

— Senator Bill Hagerty (@SenatorHagerty) January 9, 2024

Meanwhile, the X safety team attributed the compromise to an unidentified individual gaining control over a phone number associated with the agency’s account through a third party.

We can confirm that the account @SECGov was compromised and we have completed a preliminary investigation. Based on our investigation, the compromise was not due to any breach of X’s s, but rather due to an unidentified individual obtaining control over a phone number…

— Safety (@Safety) January 10, 2024

“We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised,” the team further stated.

ZachXBT, a prominent blockchain investigator, shared a screenshot of Gensler’s prior announcement emphasizing the importance of account authentication, which, in an embarrassing turn of events, led to the SEC’s compromise.

Hi @GaryGensler this is a reminder to secure your financial accounts as well as protect against identity theft and fraud.

Remember to:
🔒Use strong passphrases or passwords
🔒Set up multifactor authentication
🔒Keep account s turned on#CybersecurityAwarenessMonth pic.twitter.com/KBNOV3KhAJ

— ZachXBT (@zachxbt) January 10, 2024

Other crypto enthusiasts have also expressed concerns about the SEC’s competency in securing investors’ funds if they cannot protect their social media accounts.