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On January 9, the SEC’s X account was compromised and used to post fake news about the approval of a Bitcoin Exchange Traded Fund (ETF). Chairman Gary Gensler immediately responded to the post, revealing that the regulator has yet to approve such an investment vehicle.
X’s research revealed that an unauthorized individual had gained control of a phone number linked to the SEC account, adding that the regulator had not implemented a two-factor authentication measure on his account.
Web3 security advisor Plumferno continues said that the SEC page was “literally SIM-switched.”
“They didn’t even have to put in a dish drainer latch, y’all. They just switched the SEC page,” he added.
Meanwhile, the crypto community pointed out the irony in several of Gensler’s posts, urging his followers to implement strong security measures while the entity he led had lax security measures.
In one such post, Gensler advised investors to use strong passwords and set up multi-factor authentication to prevent identity theft and fraud.
US lawmakers are demanding an explanation from the SEC.
The security breach has prompted several US lawmakers to demand an official investigation.
Senator Bill Hagerty named the event was unacceptable and highlighted the need for Congress to seek answers from the SEC, similar to the regulator’s demand for public companies to be held accountable for similar market-altering mistakes.
Echoing similar sentiments, Senator Cynthia Lummis stressed the importance of transparency regarding fraudulent announcements, which underlines their potential to manipulate markets.
Senators JD Vance and Thom Tillis insisted the SEC chairman to provide an official explanation, criticizing the regulatory agency charged with overseeing global capital markets for such significant oversight.
“It is unacceptable that the agency charged with regulating the epicenter of the world’s capital markets would make such a colossal mistake,” the lawmakers wrote.
Chairman of the House Financial Services Subcommittee on Oversight and Investigations, Representative Bill Huizenga, made the point to assure regarding the SEC’s actions, questioning whether compromised accounts played a role in the regulatory process.
Representative Ann Wagner marked the impact on millions of investors as a result of the alleged hack of the SEC’s X account, characterizing this as a clear case of market manipulation.
Lawmakers all agree that the incident has led to calls for transparency, accountability and a thorough investigation into the security practices of regulatory bodies, as the consequences extend beyond mere social media breaches and to potential market manipulation that could put investors at risk. on a significant scale.