U.S. lawyers and senators are calling on Congress to initiate an investigation into the U.S. Securities and Exchange Commission (SEC) following a reported compromise of its X (formerly Twitter) account. The breach resulted in a false report claiming that spot Bitcoin exchange-traded funds (ETFs) had been approved.
U.S. Senator Bill Hagerty expressed his concern, stating, “Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable.”
U.S. Senator Cynthia Lummis also demanded transparency from the SEC regarding the events leading to the false post. Concerns were raised by U.S. Representative Ann Wagner, who referred to the incident as “clear market manipulation” that affected millions of investors. She mentioned her plans to seek more answers from SEC Chair Gary Gensler on the matter.
Charles Gasparino of Fox Business suggested that the SEC might have to investigate itself for potential market manipulation, as indicated by feedback from securities lawyers.
Bloomberg ETF analyst James Seyffart noted that Gensler might be displeased with the staff member responsible for the alleged security breach and that there could be consequences.
Investment manager Timothy Peterson criticized the SEC for failing to protect its own social media account, raising questions about the commission’s ability to safeguard investors against market manipulation.
X Safety, an account controlled by X, confirmed that the SEC’s account was compromised due to an unidentified individual gaining control over a phone number associated with the SEC account through a third party. X Safety also noted that the SEC’s X account lacked two-factor authentication at the time of the breach.
Bitcoin advocate Layah Heilpern highlighted that the false SEC post remained online for 20 minutes, accumulating at least 4.4 million views during that time, which raised concerns about market manipulation.
The incident has led to calls for a thorough investigation into the security of regulatory agencies and their ability to prevent and respond to such breaches, given the significant impact they can have on financial markets and investor confidence.
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