The digital assets world got excited about a false Bitcoin exchange-traded funds (ETFs) approval from the U.S. Securities and Exchange Commission (SEC). Tressing on the manipulation in the market, senators J.D. Vance and Thom Tillis penned a letter to SEC Chair Gary Gensler. The letter, dated January 9th, expresses concern over the SEC’s handling of social media communications and demands clarity regarding the compromised announcement.
Congressional inquiry launched
According to the letter, the senators highlighted the sequence of events that unfolded on January 9th, where the SEC’s official X account initially announced the approval of Bitcoin ETFs at 4:11 pm. The announcement triggered widespread media coverage and social media sharing, leading to a notable spike in Bitcoin’s value.
However, at 4:26 pm, Gensler posted on X, acknowledging the compromise of the SEC’s account and clarifying the unauthorized nature of the earlier announcement. The subsequent confusion caused a sharp decline in Bitcoin prices.
The letter addresses serious concerns about the SEC’s internal cybersecurity procedures, emphasizing the agency’s tripartite mission to protect investors, maintain fair markets, and facilitate capital formation. The senators argue that such a “colossal error” is unacceptable for an agency entrusted with regulating the world’s capital markets.
Watchdog asked to answer
To gain a comprehensive understanding of the breach, Senators Vance and Tillis have requested a briefing from the SEC staff no later than January 23, 2024. Additionally, they posed a series of questions and information requests that the SEC is urged to respond to by the same date. Key inquiries include details about the nature of the erroneous announcement, whether it was made by an SEC employee or an external entity, and the impact of the incident on the SEC’s timeline for Bitcoin ETF approval.
Furthermore, the letter seeks clarification on the Commission’s plans for investigating the error, how it intends to rectify financial losses incurred by investors, and whether the SEC’s recent rulemaking on cybersecurity disclosures could be applied in this context.
The incident has not only triggered a congressional inquiry but also prompted an investigation by U.S. authorities into the compromise of the SEC’s social media account. The aftermath of this cybersecurity breach adds a layer of scrutiny to the SEC’s impending decision on the approval of spot Bitcoin ETFs, further amplifying the significance of this highly anticipated regulatory milestone.
The false announcement did pump Bitcoin price a bit. BTC price went on to touch the $47,893 mark. However, Bitcoin is trading at an average price of $45,553, at the press time.
