Lawmakers Demand Briefing on SEC's Compromised X Account
Four U.S. lawmakers have sent a letter to U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, demanding a briefing on the SEC's compromised X account. The breach resulted in a false tweet announcing the approval of bitcoin exchange-traded funds (ETFs) on January 9. The official X account of the SEC was compromised on Tuesday evening.
The letter, signed by Chairman of the House Financial Services Committee Patrick McHenry, Chairman of the Subcommittee on Oversight and Investigations Bill Huizenga, Chairman of the Subcommittee on Digital Assets, Financial Technology and Inclusion French Hill, and Chairman of the Subcommittee on Capital Markets Ann Wagner, expresses concern over the SEC's ability to fulfill its mission in protecting investors and maintaining fair and efficient markets. The lawmakers highlight that the SEC's account did not have two-factor authentication enabled, allowing an unidentified individual to gain control of a phone number associated with the SEC's account.
The lawmakers demand answers from the SEC regarding the breach and how the commission plans to prevent similar incidents in the future. They request a briefing from the SEC to the Committee staff by January 17, 2024.
Preliminary Investigation Reveals X Account Compromised
Following the incident, X confirmed that the SEC's account was compromised. However, X's preliminary investigation suggests that the compromise was not due to any breach of X's systems. Instead, an unidentified individual gained control over a phone number associated with the @SECGov account through a third party. It was also revealed that the account did not have two-factor authentication enabled at the time of the breach. X encourages all users to enable this additional layer of security.
The SEC issued a statement stating that they will collaborate with law enforcement and government partners to investigate the unauthorized access and any related misconduct. The SEC aims to determine appropriate next steps in response to the breach.
Lawmakers Criticize SEC and Chair Gensler
In addition to demanding a briefing, several lawmakers criticized the SEC and Chair Gensler after the incident. Senator J. D. Vance expressed his disappointment, calling it unacceptable for the agency responsible for regulating the world's capital markets to make such a colossal error. Senator Bill Hagerty demanded accountability from the SEC, comparing their mistake to that of a public company. Senator Cynthia Lummis emphasized the need for transparency, stating that fraudulent announcements can manipulate markets.
The SEC's compromised X account and the subsequent fake tweet about the approval of spot bitcoin ETFs have raised concerns among lawmakers and market participants. The incident highlights the importance of strong security measures, such as two-factor authentication, to protect sensitive accounts. The SEC's investigation into the breach and their efforts to prevent future incidents will be crucial in restoring trust and confidence in the regulatory body.
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By: Kevin Helms
Title: SEC Investigates X Account Breach, Lawmakers Demand Answers
Sourced From: news.bitcoin.com/us-lawmakers-slam-sec-over-fake-bitcoin-etf-tweet-say-this-failure-is-unacceptable/
Published Date: Fri, 12 Jan 2024 05:00:38 +0000