More US Senators are demanding answers from the US Securities and Exchange Commission (SEC) regarding Tuesday’s high-profile social media fiasco involving the approval of Bitcoin (BTC) exchange-traded funds (ETF).
Senators Ron Wyden (D-Oregon) and Cynthia Lummis (R-Wyoming) wrote Friday to the SEC’s inspector general requesting an investigation into the hack of the regulator’s X account.
“The SEC’s failure to follow cybersecurity best practices is inexcusable, especially given the agency’s new cybersecurity disclosure requirements. Furthermore, a hack that results in the publication of material information for investors could have significant consequences for the stability of the financial system and confidence in public markets, including possible market manipulation.”
Someone compromised the SEC’s X-account on Tuesday and issued a false statement claiming the regulator had approved spot Bitcoin ETF applications, sending the crypto world into a temporary frenzy.
SEC Chairman Gary Gensler took to the social media platform 15 minutes later to explain that his agency’s profile had been hacked and that the false statement was removed later that day. The SEC legitimately approved 11 spot Bitcoin ETFs the next afternoon.
X’s update page confirmed the SEC hack on Tuesday evening, but claimed it was not due to a breach of the social media giant’s systems. Instead, an unidentified individual allegedly gained control of a phone number linked to the SEC’s account.
X also noted that the regulator has failed to set up multi-factor authentication (MFA) for his profile, despite Gensler publicly encouraged investors last year to secure their financial accounts with that feature.
Hi @GaryGensler this is a reminder to secure your financial accounts and protect yourself from identity theft and fraud.
Remember to:
?Use strong passphrases or passwords
?Set up multi-factor authentication
Keep account notifications enabled#CybersecurityAwarenessMonth pic.twitter.com/KBNOV3KhAJ— ZachXBT (@zachxbt) January 10, 2024
Wyden and Lummis specifically pointed out the SEC’s lack of MFA in their letter.
“We urge you to investigate the agency’s practices regarding the use of MFA, and in particular phishing-resistant MFA, to identify any remaining security gaps that need to be addressed.”
They are not the first senators to address the SEC on their negatives. On Tuesday, JD Vance (R-Ohio) and Thom Tillis (R-North Carolina) sent a public letter to Gensler demanding an explanation for the hack, which they noted led to Bitcoin price volatility and public confusion.
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