Senators Call for Investigation into "Compromised" SEC Tweet about Bitcoin ETF

In a letter dated January 11, Senators Ron Wyden and Cynthia Lummis have called upon the SEC's Inspector General, Deborah Jeffrey, to initiate an investigation into the commission's cybersecurity practices. They expressed concern that fraudulent announcements like the one made on SEC's social media platform could manipulate markets and called for transparency regarding the incident.

Two U.S. legislators have deemed it "inexcusable" that the SEC failed to follow security protocols, allowing a hacker to post a message on January 9, prematurely claiming approval for Bitcoin ETF listing on exchanges. They emphasized the potential impact of such a breach on the financial system's stability, including market manipulation, and requested updated information on the investigation and SEC's corrective actions by February 12, 2024.

Wyden and Lummis pointed out that the SEC's X account should have included multi-factor authentication, which was absent at the time of the breach. They also recommended protecting accounts with phishing-resistant hardware tokens. This call for investigation echoes similar demands made by Senators J.D. Vance and Tom Tillis and other politicians following the publication and subsequent removal of the fake tweet.

Before SEC officially approved the listing of Bitcoin ETFs on January 10, many experts assumed the approvals were imminent. Asset managers had begun amending their 19b-4 forms on January 5, and the Cboe BZX exchange had notified the approval of securities listings for several firms. The false start caused by the SEC tweet, which remained online for approximately 20 minutes, shook the crypto market and cast doubt on the actual approval. On January 10, after approval, SEC announced plans to investigate the breach and the tweet jointly with the Federal Bureau of Investigation and the Commission's Inspector General. The authorship of the post remains unclear at the time of publication.