A group of Republican lawmakers from the U.S. House Financial Services Committee has called on Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), to expedite the investigation into the January 9, 2024, hacking incident involving the agency's X account.
In a press release on January 10, the committee announced that it had sent a letter to the SEC, requesting a comprehensive briefing by January 17, 2024. The investigation follows a tweet from the compromised SEC X account on January 9, falsely asserting the approval and listing of a Bitcoin ETF on all registered national securities exchanges. The misleading tweet garnered widespread attention on business news sites, Bloomberg TV, and various social media platforms until Chairman Gensler clarified that the agency's account had been hacked.
During the 15-minute gap between the misleading post and Gensler's clarification, the price of Bitcoin surged to nearly $48,000, underscoring the potential impact of misinformation on the cryptocurrency market. The committee's letter underscores the crucial connection between the SEC's ability to fulfill its mission, including investor protection, market fairness and efficiency, capital formation, and effective communication with market participants.
The committee, chaired by Patrick McHenry and including members Bill Huizenga, French Hill, and Ann Wagner, holds jurisdiction to oversee SEC activities. The recent events represent a significant challenge for Gensler, who has prioritized cybersecurity as a key focus.
Gensler has been actively enforcing stricter regulations to enhance corporate disclosures regarding cyber incidents, taking punitive measures against cryptocurrency platforms that misled investors about their cybersecurity practices.
Following Gensler's clarification of the scam, Senate Banking Committee member Bill Hagerty criticized the SEC's account breach as "unacceptable" and called for accountability. The X Security Team attributed the breach to unidentified individuals who gained control of phone numbers associated with agency accounts through a third party. The team also confirmed that the account did not have two-factor authentication enabled at the time of the breach.
Blockchain investigator ZachXBT shared a screenshot of Gensler's previous statement emphasizing the importance of account authentication, suggesting its relevance to the SEC compromise. Cryptocurrency enthusiasts have expressed concerns about the SEC's ability to safeguard investors' funds if it cannot secure its social media accounts.
