Senators Ron Wyden and Cynthia Lummis have called on the Securities and Exchange Commission (SEC) Inspector General to launch a probe into the recent hack that resulted in a fake announcement of a spot Bitcoin exchange-traded fund (ETF) approval being posted on X (formerly Twitter). The senators emphasized the inexcusable failure of the SEC to follow cybersecurity protocols and urged an investigation into the matter.


Key Points:

  • Inexcusable Security Failure: Senators Wyden and Lummis described the SEC's failure to follow cybersecurity protocols as "inexcusable" and raised concerns about the potential impact on the stability of the financial system and trust in public markets. They called for a thorough investigation into the hack and the SEC's cybersecurity practices.

  • Call for Probe: The senators have urged SEC Inspector General Deborah Jeffrey to initiate an investigation into the commission's cybersecurity practices. They emphasized the importance of addressing the hack that led to the publication of false information on X, potentially impacting investors and market stability.

  • Request for Update: Senators Wyden and Lummis have requested an update on the investigation and the SEC's remediation efforts by February 12, 2024. They expressed concerns about the implications of a hack resulting in the publication of material information for investors and highlighted the need for prompt action.

  • Security Measures: The senators pointed out that the SEC's X account lacked multifactor authentication, a security feature that could have helped prevent unauthorized access. They also suggested the use of phishing-resistant hardware tokens to secure accounts against cyber threats.

  • Follow-Up to False Tweet: The false announcement on X regarding the approval of a spot Bitcoin ETF occurred on January 9, creating confusion in the crypto market. The SEC officially approved spot Bitcoin ETF listings on January 10, following which the commission announced plans to investigate the tweet with the Federal Bureau of Investigation.

Implications and Response: The hack and the subsequent fake tweet had significant implications for market stability and investor trust. Senators Wyden and Lummis are actively calling for a thorough investigation into the incident, emphasizing the need for improved cybersecurity measures at the SEC to prevent such incidents in the future.

Conclusion: The call for an investigation by Senators Wyden and Lummis reflects the growing concern among lawmakers regarding cybersecurity practices at regulatory bodies. The outcome of the probe and the SEC's response to the incident will likely shape future discussions on enhancing cybersecurity measures within the financial regulatory framework.


(TURNER WRIGHT, COINTELEGRAPH, 2023)