Lawyers and politicians are demanding an investigation of the SEC’s handling of the Bitcoin ETF post.

Politicians and securities lawyers demand investigation into false SEC announcement about approval of spot Bitcoin ETFs on X website.

Congress Calls for Investigation into SEC Following X Account Compromise

Lawmakers and experts demand transparency and accountability from the U.S. Securities and Exchange Commission (SEC) after its X (formerly Twitter) account was compromised and falsely reported the approval of spot Bitcoin (BTC) exchange-traded funds (ETF). This incident has raised concerns about market manipulation and the SEC’s ability to protect investors.

Wait, what happened? According to reports, the SEC’s official X account was hacked, and a false tweet was posted, claiming that the agency had approved the much-anticipated spot Bitcoin ETFs. The news quickly spread, impacting millions of investors and causing market turmoil. However, the tweet was quickly taken down after 20 minutes, but not before it garnered over 4.4 million views.

How did Congress react? U.S. Senator Bill Hagerty expressed his outrage, stating that Congress needs answers and accountability from the SEC, just as they would expect from any public company that made such a significant market-moving mistake. Senator Cynthia Lummis also demanded transparency and an explanation from the SEC regarding the incident. U.S. Representative Ann Wagner called it a clear case of market manipulation and expressed her intention to seek more answers from SEC Chair Gary Gensler.

Market manipulation and SEC’s responsibility The false tweet and the subsequent market impact have raised concerns about potential market manipulation. Investment manager Timothy Peterson believes that the SEC’s inability to protect its own social media account raises doubts about their ability to protect investors. This incident places a spotlight on the SEC’s role in safeguarding the market and reinforces the need for stringent security measures.

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SEC’s response and breach investigation The SEC’s X Safety account, responsible for investigating the incident, confirmed that the SEC account was compromised due to unauthorized access to a phone number associated with the account. The breach was facilitated through a third party, and it was revealed that the SEC’s X account did not have two-factor authentication enabled at the time. The SEC, however, denied any involvement by its staff in publishing the unauthorized tweet.

The aftermath and future outlook While the compromised tweet caused temporary market upheaval, there is still hope for the approval of spot Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas remains optimistic, predicting that official approval may come between 4:00 pm to 5:00 pm Eastern Time on Jan. 10. This incident serves as a reminder of the challenges faced by regulatory agencies in the digital age and the importance of robust security measures.

What can we expect moving forward? Given the severity of the breach, it is likely that the SEC will conduct a thorough investigation to identify how the compromise occurred and take appropriate measures to prevent future incidents. The incident also underscores the need for regulatory bodies to strengthen their cybersecurity protocols to protect their online presence effectively.

Conclusion The SEC’s X account compromise and the false approval of spot Bitcoin ETFs have highlighted the vulnerabilities present in the digital landscape and the potential for market manipulation. Lawmakers and experts are calling for transparency, accountability, and more stringent security measures within regulatory agencies. As the SEC continues to address the aftermath of this incident, investors eagerly await the decision regarding the spot Bitcoin ETFs.

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Q&A: Frequently Asked Questions about the SEC X Account Compromise

1. How did the SEC’s X account get compromised? The SEC’s X account was compromised when an unidentified individual gained control over a phone number associated with the account. This breach was facilitated through a third party and took advantage of the absence of two-factor authentication.

2. What impact did the false tweet have on the market? The false tweet caused temporary market turmoil, triggering reactions from investors and potentially impacting trading decisions. However, the tweet was taken down relatively quickly, mitigating the long-term consequences.

3. Is the SEC investigating the breach? Yes, the SEC has confirmed that it is investigating the account compromise to determine the cause and prevent future incidents. They have also denied any involvement by their staff in publishing the unauthorized tweet.

4. What does this incident mean for investor protection? The breach raises concerns about the SEC’s ability to protect investors, as their own social media account was compromised. It emphasizes the need for robust security measures and highlights the challenges faced by regulatory agencies in the digital age.

5. Is there still hope for spot Bitcoin ETF approval? Despite the incident, Bloomberg ETF analyst Eric Balchunas remains optimistic about the approval of spot Bitcoin ETFs. He predicts that the official approval may come at a later time, before or after the incident, between 4:00 pm to 5:00 pm Eastern Time on Jan. 10.

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References

1. Gary Gensler Reports SEC X Account Compromised
2. Grayscale’s GBTC Tops ETFs: Standard Chartered Bullish on BTC
3. SEC Approve Spot Bitcoin ETF
4. Crypto Reputational Issues Year 2024

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