More US senators are demanding answers from the U.S. Securities and Exchange Commission (SEC) regarding Tuesday’s high-profile social media fiasco related to the approval of Bitcoin (BTC) exchange-traded funds (ETF).
Senators Ron Wyden (D-Oregon) and Cynthia Lummis (R-Wyoming) wrote to the inspector general of the SEC on Friday requesting an investigation into the hack on the regulator’s X account.
“The SEC’s failure to follow cybersecurity best practices is inexcusable, particularly given the agency’s new requirements for cybersecurity disclosure. Additionally, a hack resulting in the publication of material information for investors could have significant impacts on the stability of the financial system and trust in public markets, including potential 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, whipping the crypto world into a temporary frenzy.
SEC Chair Gary Gensler took to the social media platform 15 minutes later to explain that his agency’s profile had been hacked, and the false statement was deleted later that day. The SEC legitimately approved 11 spot Bitcoin ETFs the following afternoon.
X’s update page confirmed the SEC hack on Tuesday evening but claimed it wasn’t due to any breach of the social media giant’s systems. Rather, an unidentified individual reportedly secured control of a phone number associated with the SEC’s account.
X also noted that the regulator failed to set up multi-factor authentication (MFA) for its profile, despite the fact that Gensler publicly encouraged investors last year to secure their financial accounts with that very feature.
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 alerts turned on#CybersecurityAwarenessMonth pic.twitter.com/KBNOV3KhAJ— ZachXBT (@zachxbt) January 10, 2024
Wyden and Lummis specifically called out the SEC’s lack of MFA in their letter.
“We urge you to investigate the agency’s practices related to the use of MFA, and in particular, phishing-resistant MFA, to identify any remaining security gaps that must be addressed.”
They aren’t the first senators to call out the SEC on its snafu. On Tuesday, J.D. 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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