Republican lawmakers harangued the Securities and Exchange Commission (SEC) in a scathing letter Wednesday after a false post on X from Chairman Gary Gensler upended Bitcoin prices.
Sens. JD Vance, R-Ohio, and Thom Tillis, R-N.C., sharply criticized the SEC after the commission's X account made an unauthorized post announcing that it had approved Bitcoin exchange-traded funds to be listed on all registered U.S. securities exchanges. The fake news sent Bitcoin prices skyrocketing, and when the SEC retracted the announcement and said its X account was "compromised," cryptocurrency prices came crashing back down.
The senators, who are both members of the Senate Banking Committee, said the confusion and volatility in cryptocurrency markets caused by the SEC's error was "unacceptable."
SEC DUPED, X ACCOUNT HACKED, BITCOIN ETF NOT APPROVED
"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," the senators wrote. "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."
X's corporate safety account said Wednesday that the SEC's account was not hacked. The company said a preliminary investigation found the account was not breached but was accessed "rather due to an unidentified individual obtaining control over a phone number associated with the [official SEC] account through a third party."
SEC'S BITCOIN ETF DEBACLE WAS RESULT OF EMPLOYEE NOT UTILIZING TWO-FACTOR AUTHENTICATION: X SAFETY
The post about Bitcoin was merely the result of an employee not having two-factor authentication on accessing the account, the Safety account said.
"We can also confirm that the account did not have two-factor authentication enabled at the time the account was compromised," the post read. "We encourage all users to enable this extra layer of security."
WILL SEC INVESTIGATE ITSELF AFTER GARY GENSLER DEALT EMBARRASSING BLOW IN BITCOIN ETF DEBACLE?
Vance and Tillis requested a briefing from the SEC on the incident, inquiring about the nature of the false post and the time frame for the SEC's decision on 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," they wrote. "It is unacceptable that the agency entrusted with regulating the epicenter of the world’s capital markets would make such a colossal error."
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An SEC spokesperson told FOX Business that an "unknown third party" had accessed its account. "That unauthorized access has been terminated. The SEC will work with law enforcement and our partners across government to investigate the matter and determine appropriate next steps relating to both the unauthorized access and any related misconduct."
FOX Business' Lawrence Richard and Suzanne O'Halloran contributed to this report.
