US Senators Call for Investigation of SEC’s Tweet About ‘Damaged’ Bitcoin ETF

More members of the United States Congress have called on the Securities and Exchange Commission (SEC) to report a hack that led to the posting of false advertising on a site to X (formerly Twitter), a Bitcoin exchange-traded fund license.

According to a January 11 letter to Axios, Senators Ron Wyden and Cynthia Lammis urged SEC Inspector General Deborah Jeffrey to launch an investigation into the commission's cybersecurity practices. The two US lawmakers called it “inexcusable” for the SEC's failure to follow protocols, which allowed a hacker to post a message on X on January 9 and sell it on a BTC exchange for the first time.

“[A] A hack that results in the publication of material information to investors can have a significant impact on the stability of the financial system and confidence in public markets, including through market manipulation. “We request that you provide us with an update on your investigation and SEC correction by February 12, 2024.”

Fraudulent ads can dominate markets, according to SEC social media. We need clarity on what happened.

— Senator Cynthia Lummis (@SenLummis) January 9, 2024

Wyden and Lummis said the SEC's X account should have enabled multi-factor authentication — something X said was not in place at the time of the hack — and “secured the account with phishing-resistant hardware tokens.” In signing their letter, the two senators followed calls for a similar investigation from Senators J.D. Vance and Tom Tillis and other policymakers after the fake tweet was published and pulled.

Related: Spot Bitcoin ETF Approved in US: What to Expect Next

Before the SEC officially approves the spot Bitcoin ETF listings on January 10, many experts speculate that approvals are coming. Asset managers began filing amendments to Forms 19b-4 on Jan. 5, and the Cboe BZX exchange has issued notices of approved securities listings from several firms.

The false launch of a Bitcoin ETF created by an SEC tweet — online for about 20 minutes — shook the crypto market and caused many people to question its validity after it went public. On January 10, following the approval, the SEC said it planned to investigate the tweet with the FBI and the commission's Office of Inspector General. At the time of publication, it was unclear who was responsible for the article.

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