US congressional panel seeks briefing from SEC on fake post on bitcoin ETFs

WASHINGTON (Reuters) – The Republican-led U.S. House of Representatives Financial Services Committee on Wednesday sent a letter to the Securities and Exchange Commission, seeking a briefing on a fake post on the SEC’s X social media account a day earlier.

WHY IT IS IMPORTANT

The U.S. securities regulator said someone briefly accessed its X, formerly called Twitter, account on Tuesday and posted a fake message saying it had approved exchange traded funds (ETF) for bitcoin, a move eagerly awaited by the crypto industry.

The SEC eventually on Wednesday approved the first U.S.-listed ETFs to track bitcoin.

KEY QUOTES

“To better understand how this breach occurred and how the SEC will ensure it cannot happen again, please provide a briefing to Committee staff no later than January 17, 2024,” the panel said in its letter to SEC Chair Gary Gensler on Wednesday.

X said on Tuesday that the SEC’s account was compromised and did not have two-factor authentication enabled at that time. The social media site also said the hack was not due to any breach of X’s systems, citing a preliminary investigation.

“This failure is unacceptable, and it is disturbing that your agency could not even meet the standard you require of private industry,” the letter on Wednesday added.

CONTEXT

The unauthorized post said the SEC had granted approval for bitcoin ETFs on all registered national securities exchanges and included a picture purporting to quote Gensler. The price of bitcoin rose after the post.

U.S. authorities including the Federal Bureau of Investigation were probing the fake post.

The SEC quickly disavowed and deleted the post and X later said the account was compromised because of an “unidentified individual” obtaining control of a phone number.

(Reporting by Kanishka Singh in Washington; Editing by Chris Reese and Richard Chang)