Prominent lawyers and senators in the United States are urging Congress to launch an inquiry into the U.S. Securities and Exchange Commission (SEC) following a reported compromise of their Twitter account, previously known as X, which disseminated false news regarding the approval of spot Bitcoin exchange-traded funds (ETFs).
Senator Bill Hagerty expressed his dismay over the incident, drawing a parallel between the SEC’s accountability and that of public companies in case of a significant market-moving error.
Hagerty insisted that Congress should seek answers, deeming the situation unacceptable. Senator Cynthia Lummis also called for greater transparency from the SEC regarding the events leading to the erroneous post.
Charles Gasparino from Fox Business revealed that securities lawyers had informed him that the SEC would need to investigate itself for potential market manipulation. U.S. Representative Ann Wagner described the incident as “clear market manipulation” that adversely affected millions of investors, vowing to obtain more information from SEC Chair Gary Gensler.
Bloomberg ETF analyst James Seyffart speculated that Gensler would be displeased with the staff member responsible for the alleged security breach, foreseeing consequences for the individual involved.
Investment manager Timothy Peterson criticized the SEC, arguing that its security breach amounted to a potential market manipulation event, a violation of the commission’s core mission of safeguarding investors.
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The incident in question, labeled as market manipulation, involved the SEC’s Twitter account, which falsely claimed the approval of spot Bitcoin ETFs.
X Safety, an account under the control of X, confirmed that the SEC’s account had been compromised due to an unidentified individual gaining control over a phone number linked to the SEC account through a third party.
Notably, the SEC’s X account lacked two-factor authentication at the time of the breach.
Layah Heilpern, a Bitcoin advocate, highlighted that the false post remained online for 20 minutes and garnered at least 4.4 million views during that period.
Heilpern asserted that this amounted to clear market manipulation.
The SEC has not provided detailed information on how their Twitter account was compromised but has denied the involvement of its staff in publishing the unauthorized tweet.
Despite the controversy, Bloomberg ETF analyst Eric Balchunas remains optimistic about the official approval of spot Bitcoin ETFs, expecting an announcement sometime between 4:00 pm to 5:00 pm Eastern Time on January 10.
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