U.S. Senators JD Vance (R-Ohio) and Thom Tillis (R-N.C.) have voiced their concerns over the breach of the U.S. Securities and Exchange Commission's (SEC) official account, asserting that it confused investors, impacted Bitcoin's price, and contradicted the SEC's mission. In a letter dated Jan. 9 to SEC Chair Gary Gensler, the senators sought answers to several questions about the breach by Jan. 23.
"These developments raise serious concerns regarding the Commission's internal cybersecurity procedures and are antithetical to the Commission's tripart mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation," Vance and Tillis said. "The announcement and subsequent reversal led to extreme volatility in the price of Bitcoin. Investors were, and remain, incredibly confused by the Commission's communications surrounding the long-awaited and consequential decision regarding Bitcoin ETFs. The United States is home to the world's deepest and most liquid capital markets and stability and soundness are imperative if investors are to maintain their trust in our markets."
Hackers reportedly utilized the SEC's official account to announce approval for all pending Bitcoin exchange-traded fund (ETF) applications, as reported by CoinDesk. This resulted in a brief surge in Bitcoin prices, which plummeted once traders realized these posts were fraudulent.
Gensler acknowledged this incident on his account, stating: "The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products."
In their letter addressed to Gensler, Vance and Tillis deemed it "unacceptable" for such a significant error to occur under SEC's watch, according to a copy of the letter shared by Vance's office. They urged Gensler for prompt responses to their queries, latest by Jan. 23. These questions included the nature of the breach, its potential impact on SEC's decision timeline for Bitcoin ETFs approval, SEC's investigation plans and measures to compensate investor losses resulting from the false post.
Tillis further stated in a post: "The SEC under Gary Gensler requires businesses to publicly provide complex analysis within 4 days of a cybersecurity incident. I expect the SEC to abide by its own rules after its account was hacked and a false report was widely circulated."
In July 2023, the SEC had introduced a rule requiring registered entities to report cybersecurity incidents via Item 1.05 of Form 8-K within four days of occurrence, as per an SEC press release. Gensler, at that time, had said: "Through helping to ensure that companies disclose material cybersecurity information, today’s rules will benefit investors, companies, and the markets connecting them."
Vance was elected as Ohio's representative in the U.S. Senate in 2022, according to his website. He is also a U.S. military veteran and author of Hillbilly Elegy.
Tillis has been serving as a U.S. Senator for North Carolina since 2015, as per his website records. He is part of the Committee on Banking, Housing, and Urban Affairs and spent nearly three decades working in private sector at IBM and PricewaterhouseCoopers prior to his Senate tenure.
