US Senators Demand SEC Investigation into False Bitcoin ETF Approval Tweet
Summary:
Senators Ron Wyden and Cynthia Lummis are urging the Securities and Exchange Commission (SEC) to investigate a cyber breach that led to a false announcement of a Bitcoin exchange-traded fund approval on the X platform (formerly Twitter). They stress the need for transparency and multi-factor authentication to prevent such hacks, which may lead to market distortion and impact public trust. The false announcement had stirred the crypto market, prompting many to question the legitimacy of the approval when eventually confirmed by the SEC.
The call for the United States Securities and Exchange Commission (SEC) to provide clarity on a cyber breach that led to a fabricated announcement on a spot Bitcoin exchange-traded fund approval on the X platform (originally Twitter) is intensifying among Congress members. A letter dated Jan. 11 and obtained by Axios revealed that Senators Ron Wyden and Cynthia Lummis are urging SEC Inspector General Deborah Jeffrey to initiate an examination of the commission's cybersecurity procedures. The Senators criticized the SEC for its apparent neglect of security protocols, which they argue enabled a cyberattack to occur on X on Jan. 9, falsely indicating the approval of a spot BTC exchange-traded product to be listed on exchanges for the first time. Wyden and Lummis express serious concerns over the potential ramifications of such acts on the financial system's robustness and the public's confidence in markets, including possible market exploitation. They have asked for an update on the issue and the efforts to rectify it by February 12, 2024. Fraudulent claims, like the one posted on the SEC's social media platform, have the potential to distort markets, highlighting the need for open communication about such incidents, Senator Lummis stated on January 9, 2024.
The senators note the SEC’s X account should have instituted multi-factor authentication, which X states wasn’t implemented at the hack's time, and fortified its accounts with phishing-resistant hardware tokens. This call aligns with earlier requests for probes by Senators J.D. Vance and Thom Tillis, among other policymakers in response to the fraudulent announcement. It was predicted by many experts that Spot Bitcoin ETF would gain official sanction following amendments to 19b-4 forms by asset managers on January 5, and notifications from Cboe BZX Exchange of approved securities listings from different companies. The erroneous initiation of the Spot Bitcoin ETF caused by the misleading SEC tweet briefly shook the cryptocurrency market, leading many to question the approval's legitimacy when it was finalized. Post the confirmation on January 10, the SEC indicated its intention to probe the false announcement with assistance from the FBI and the commission’s Office of the Inspector General. The individual or group responsible for the misleading tweet remains unknown at present.
Published At
1/12/2024 11:35:00 PM
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